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I own free and clear an older home (my Dad gifted it to me after my divorce 12 years ago. I have been renting it and the detached garage apt. for about 12 years. I live 6 hours away from it so I can't take care of it like I need to. I would like to sell it so I don' t have to stress myself out about it. I can only get maybe 80,000 for it. Can you tell me how I can keep from paying so much in sales taxes on it?
You are completely confused and exemplifying that you need specific, individual help with this, to both mitigate tax and avoid what could be substantial liabilities (tax, penalties, interest, etc). However, it is a basic and fundamental tax matter that does not require highly expert help.
You ask about sales tax. There is no sales tax on the seller of real estate in any State I know of. Sales tax anywhere is imposed on the buyer (not the seller), and I am unaware of it being applied to real estate (especially residential). There may be some minor transfer type fee's or taxes similar to a sales tax, but those are normally not much of a consideration.
Income tax - specifically long term capital gains, will be a matter to determine. The gains tax this year is modest (capped at 15%). So the year of the transfer may make a difference. The tax is ONLY on the gain in the sale. That means your basis - the value of the house when given to you (which may have had some tax consequences then), and the costs of owning and maintaining/improving the property as well as things like depreciation that was available to you as a tax beneffit every year you owned it, to determine what your "basis" is needs to be calculated. The difference to the amount you sell it for then becoming the Gain (OR Loss) and tax or tax benefit on that. In todays real estate word, selling investment real estate frequently produces a tax benefit.
I suspect you have been in the Real Estate business, (owning and running rental property - JUST LIKE Donald Trump) without reporting it as such and have lost many possible great benefits for years.
One of the those common things people in the field see is that those who try and outsmart the tax rules, and really have not a blessed clue, tend to screw themselves much more than they make any benefits.
What else can I help you with?
Does every rental property involve a rental property tax?
In the U.S., property taxes are generally paid by property owners. Renters generally pay a fixed monthly amount to the landlord/proprietor with no tax added.
You sell residential rental property how long do you have to reinvest the gain to avoid capital gain tax?
To avoid capital gains tax on the sale of residential rental property, you can utilize a 1031 exchange, which allows you to defer taxes by reinvesting the proceeds into a similar property. You must identify a replacement property within 45 days of the sale and complete the purchase within 180 days. If you do not follow these timelines, the capital gains tax will apply to the sale.
Who pays property tax on a rental home?
Property taxes are the responsibility of the owner. Unless there is a clause in the lease saying otherwise, the renter/leasor is not obligated to pay them. The government will place a lien on the property.
Can you claim someones property if you pay the taxes?
Generally, if you pay someone's property tax bill you would be considered a volunteer. Paying the bill, in and of itself, does not give you any special authority. To acquire title to delinquent tax title property, the municipality must take possession of the property through a tax taking procedure and then convey it to a new owner at a sale of tax title properties. You should speak to someone at the tax assessor's office.
Do I pay taxes on a rental sold in another state?
I assume you are saying you own a rental unit that is located in another state and you sold it. If you are a US Citizen or permanent resident, you must pay federal income tax on any profits derived from a sale anywhere in the world. If you are a resident for tax purposes of a state that imposes an income tax, you must pay state income tax to the state where you are a resident. If the state where the property is located has an income tax, you must also file a non-resident return in that state and pay any appropriate income tax to that state. This can create a situation where you must pay income taxes to two different states (the one where you live and the one where the property is located) on the same profit. Ordinarily the state where you live will grant you a credit for the amount of tax you paid to the other state. The credit however will not exceed the amount the resident state would tax the same income.
Does every rental property involve a rental property tax?
In the U.S., property taxes are generally paid by property owners. Renters generally pay a fixed monthly amount to the landlord/proprietor with no tax added.
You sell residential rental property how long do you have to reinvest the gain to avoid capital gain tax?
To avoid capital gains tax on the sale of residential rental property, you can utilize a 1031 exchange, which allows you to defer taxes by reinvesting the proceeds into a similar property. You must identify a replacement property within 45 days of the sale and complete the purchase within 180 days. If you do not follow these timelines, the capital gains tax will apply to the sale.
Do business owners have to pay a tax on rental property?
Property taxes are generally the responsibility of the owner. They are paid for by the owner from the rent he or she receives. If the business owns a property and rents it to others, they must pay tax, but if the business rents the property, they do not.
What is the tax on rental property in Michigan?
Rental property tax is Michigan is relatively high. For a $120000 it is around $7000.
Indiana Tax sale property has a quitclaim deed?
Tax sale property has a quit claim deed. Any liens on the property, mortgages, from the previous owner will remain on the property. You would be responsible to pay off the lien or the lien holder would foreclose.
Do you have to pay tax when you buy your first house in nsw when your not going to live in it and you may rent it out?
I don't know if you are talking about income tax or property taxes. The answer is the same for both. In renting the house out you will pay income taxes on your gain from rental income and you will pay property taxes for the ownership of the property.
Can you depreciate rental property for tax purposes?
Yes, rental property can be depreciated for tax purposes. Depreciation allows property owners to deduct a portion of the property's cost each year as an expense, reducing taxable income and potentially lowering tax liability.
Do you have to pay taxes on property in Thailand as well as paying taxes on the same property in England?
If you live in the UK, you must declare rental income from overseas rental properties on the foreign pages of your tax return. If you pay foreign tax on the income, you can usually get credit for this against the UK tax you have to pay on it. You can expenses from overseas property letting income as from UK property letting income, including travel costs.
Who pays property tax on a rental home?
Property taxes are the responsibility of the owner. Unless there is a clause in the lease saying otherwise, the renter/leasor is not obligated to pay them. The government will place a lien on the property.
What are the risks of turning your home into a rental property?
There are multiple risks of turning your home into a rental property. First, finding a responsible, reliable tenant who will take care of the property. Second, finding someone who will pay the rent in a timely basis. Third, you will have income tax consequences.
Do you have to pay tax on used car sold to an individual?
The buyer will pay the sales tax when they transfer the car into their name. The seller will pay property tax on the vehicle up untll the day the car is transfered into the buyers name. Transfer the car on the day of the sale.
How can I reduce rental income tax?
You can reduce rental income tax by taking advantage of deductions such as mortgage interest, property taxes, and expenses related to maintaining the rental property. Additionally, keeping detailed records of all expenses and seeking advice from a tax professional can help minimize your tax liability.
