Tag Archives: capital-gains

DRIP DRIP DRIP

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The snow is[photopress:snow_picture.jpg,thumb,alignright] finally melting off the tree branches in my yard today. One foot of snow fell last Wednesday afternoon turning my normal 45 min commute to Issaquah into 4 hours. I’m really impressed with how well the agents are doing maneuver on these slick streets. I had a showing Friday night, Saturday and Sunday on one listing, even though the roads are still slick and hard to navigate out here in Issaquah.

Nice to be back to RCG. I’ve been buried in an investment class for the last 3-4 months and haven’t been keeping up with the post reading or writing. Came up for breath today and I see that a Welcome to all the new contributors is in order! We’re honored to have you on board. 

Given that it’s tax time, I want to remind everyone to be sure you’re aware of all the tax advantaged investment programs out there for real estate. Who knows how long these will last. There’s a great new program called a solo 401K to go along with the Roth IRA programs investing in real estate.  I’ve blogged about this before and hope you check it out especially if you’re paying taxes on any real estate gains this year. 

I’m building a good retirment by investing this way and it will all be tax free.  A key player in the IRA game is the custodian.  I’ve been waiting for the new custodian in Seattle, Viking Bank with Jim Winder in charge of the Self Directed IRA department to get their website up and running so that RCG readers can get information on line. Jim Winder is a well known guru of self-directed IRA’s and he is respected local celebrity and has taught many many classes in the past.  He promises the Viking Bank site will be functional soon.  But it is tax time so until then, I’ll direct you to Pensco Trust to learn all you need to know about some really great tax strategies using some of the money you’ve already socked in retirement plans. Pensco Trust is a national leader in IRA education so I hope you find these articles helpful.  

Once Jim’s fully in the game I’ll post you his site and when he’ll be teaching live classes.  LTD will be hosting one, soon, I hope, and by the way, I met Jim here on RCG!

Capital Gains on a Primary Residence

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Noah Rosenblatt brings up a timely article (timely for me anyway) on the tax benefits associated with selling a primary residence. Here’s the pertinent info:

To claim the maximum exclusion on the capitol gains on the sale of your home, you MUST first meet the Ownership and Use tests…

  • Owned the home for at least 2 years (the ownership test), and
  • Lived in the home as your main home for at least 2 years (the use test)

The general idea is that a single person can exclude $250K in capital gains while a married couple filing joint taxes can exclude $500K provided they meet some basic conditions and the meet the two tests above. (Noah includes the conditions on his post!)

Now for my question, is there a timeframe that someone needs to plow this money back into a new residential property in order to reap the capital gains benefits?

Since Noah doesn’t mention this, I’m assuming that the idea of reinvesting within a certain timeframe only applies to investment properties, but I’d sure like to be more confident of this assumption and (horror of horrors) I’d rather not try to read the tax code!