Filed under: Austin Texas, Austin Texas News, Austin Texas Real Estate, Real Estate News, Real Estate Tips and Advice, Texas | Tags: Austin, buyers, capital gains, Housing and Economic Recovery Act, investors, move-up buyers, sellers, tax, Tax Alert, taxes, Texas
Tax Alert: the recently passed Housing and Economic Recovery Act contains a tax pitfall for investors and possibly move-up buyers.
For investors, move-up buyers and property owners whose property has increased in value this legislature may not be an economic stimulus or economic recovery for you. The legislation may increase your taxes,so be very aware and plan around it.
Changes affect:
- Tax-Free Exchanges – 1031 Exchange
- Capital Gains calculations
- Converting property to or from personal use to second home or investment property
- Investors
- Move-Up Buyers
- Buyers
- Sellers
Investors: Certain “1031″ exchanges will be affected. Please consult with an attorney, a professional tax consultant or financial planner. Complete your transaction before December 31. 2008.
Move-Up Buyers: If you are a move-up buyer and your personal residence has been used as a second home or rental property you will be affected. Time is short to avoid falling under the new capital gains tax law>Complete your transaction before December 31, 2008.
Buyers: You do not know what the future holds. If you should suffer a temporary reverse in finances and needed to rent your home to get through the difficulty the new capital gains structure could affect you. The same is true if you should get a job transfer and converted your home into a second home or rental. It is wise to consult a financial planner or tax professional if these or other circumstances would occur.
Sellers: If your personal residence has been used as a second home or has been used as a rental the change in how capital gains are calculated will affect you. You will pay capital gains taxes on a ratio basis: how many years as a personal residence vs. second home/rental.
Under the old tax structure, savvy real estate professionals (and homeowners) were able to take advantage of the guidelines to help existing home owners move-up, relocate, turn their home into an investment or convert an investment property to a personal residence. How that is done and the taxes that will be paid have changed.
The new tax structure will take effect on January 1, 2009. Please consult a skilled tax accountant. If you plan correctly you may be able to save thousands of dollars in taxes! Investor, buyer, and seller this new tax structure can affect you
If you are considering a move which will involve converting your property to or from a personal residence to a second home or rental please be sure you work with a Realtor® who is “investor” savvy and is current with the recent tax changes.
Finances are always very personal and, like homes, no two situations are exactly alike. I am not a tax attorney, tax consultant or a financial advisor. However, I do know real estate and I do know that the capital gains tax is an important issue for investors, buyers and sellers.
Filed under: Austin Texas, Austin Texas News, Texas, Things to do in Austin, Visit Austin | Tags: Austin, Ice Cream Festival, Waterloo Park
I scream, You scream, We all scream for ice cream and the dog barks!
There is a new and fun festival here in Austin. I would like to announce the Second Annual Austin Ice Cream Festival which will be held this weekend.
Of course, there will be lots of ice cream, popsicles and doggie ice cream, too. The festival will feature a pet friendly version of our favorite snack that will have your pet howling for more.
The Ice Cream Festival not only benefits “the kid” in all of us, it also benefits several local charities such as the Austin Children’s Shelter and Paws.
The Festival will be centered around old fashioned family fun with activities, games, contests and live music (this is Austin, after all). Popsicle Sculptures and Popsicle Stick Races will make the day complete.
Come cool off this Saturday at the Second Annual Austin Ice Cream Festival being held at Waterloo Park from 10am until 7pm. Kids under 12 are free and all kids over 12 can gain admission for a budget-friendly $2 bucks. Support local business and local charitable organizations with your scream for more ice cream.
The event is sponsored by Amplify Credit Union and Whole Foods Market.
Filed under: Austin Texas, Austin Texas News, Austin Texas Real Estate, Real Estate News, Real Estate Tips and Advice, Texas | Tags: buyers, home buyers, Housing Bill, new Housing Bill, tax credit
The new Housing Bill is over 700 pages long and not written for the faint of heart. To determine what tax credits are most advantageous for you, please be sure to obtain counsel from a professional tax consultant or accountant.
There have been some tax credit additions, increases and streamlining to tax programs already in existence. Many of the tax credit incentives are temporary and will end with the year 2009. There are some new tax advantages for those who desire to invest in the residential real estate market but, remember, there are time limits involved.
Real estate investors will see a temporary increase in the tax credit limitations for the low-income housing tax credit program. Limits are set state-by-state and Tax credits have defined time lines.
The Housing Bill has also changed the way Capital Gains are calculated and how the tax credit is applied. If you are a move-up buyer, be sure to check with a professional as to how this change would affect you.
The Housing Bill offers tax credits to first time home-buyers, defined as anyone that has not owned a home in the past three years. The tax credit is a loan of sorts since it must be paid back over the next 15 years but it is an interest free. Repayment begins in 2010 in $500 increments. These payments are in the form of a “recapture tax credit”.
The tax credit for first time home-buyers is not a flat credit of $7,500 for all buyers during the qualifying period. It is 10% of the home’s purchase price with a cap of $7,500.
The tax credit was designed to stimulate home sales and to aid first time home buyers. However, it is a tax credit to be taken when you file taxes after the purchase of a home. The home must be purchased after April 9, 2008 and before June 30, 2009. At this time, there is no up front money to help you purchase a home.
It is important for first time buyers, move-up buyers and investors to understand all the advantages of the new Housing Bill. The leaders of the nation designed the bill to stimulate the housing market. There are advantages to tax credits. However, finances are like real estate; very personal and no two circumstances (homes) are exactly alike. Be sure to consult a professional in the field of accounting and/or taxes.
