This is an important election coming up. For those that are full time in real estate it is important to know and understand the issues. It will mean the difference of is it smarter to own or rent? Even though I am in real estate, I have to stop and think of the consequences of my actions. For me that may come down to a client asking some advice, or deciding myself what is a good purchase or investment. This topic is troublesome. There are answers on the Internet that say they refute this but in actuality they do not. They defer it, because Congress writes the bills not the president. The president however can set a policy wish list or direction that he would like to proceed and Obama has.
For the past several years the capital gains of a home could be excluded if you met the requirements of primary residence, occupancy etc. 500K could be gained every 2 years tax free. If Obama is elected, he has already said the gains will be taxed as ordinary income at 28%. So the sale of a home with 500K in the future will be taxed and over 140K will be owed to the government. The question arises at a home at any price is why bother owning a home or purchasing a home as an investment if you will be taxed on the gain? Most real estate agents do not understand the dynamics of the business they are in. Taxation will kill our business and forever limit the chance to gain meaningful appreciation again until the tax laws would change sometime down the road again. Why would you vote for someone that has already said he is going to tax the sale of a home? He will return real estate to the stone ages with just this tax policy.
"When selling your primary residence, and live in it for 2 of the last 5 years - you can make up to $250,000 in profit if you're a single owner, or claim twice that if you're married, and not owe any capital gains taxes"
Obama's Economic Adviser - taxing the sale of a home.
I think the major pause in real estate right now is persons are afraid to commit right now until they know who will be elected, and what policies will dominate. You can't blame buyer's for being nervous right now to invest!
 |
|
|
Atlanta real estate, homes for sale, new homes, foreclosures, luxury homes, relocation. Serving the Atlanta real estate market since 1993 as experienced Atlanta real estate professionals & REALTORS.
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2009 ActiveRain Corp. All Rights Reserved
Capital Gain Definition - Confiscatory Tax #29.
Jim, which is why I just don't Realtors voting against their careers. (((duh)))
Jim:
We started years ago when real estate was very much cheaper then now with a $125,000 exemption or trade up and raise your basis.
Now the $500,000 married $250,000 single exemption. This offset the raise in prices. It also let professional people in real estate take the similar treatment as given to equities for capital gains, if they wish to live in the property two years. It ended the roll up and raising your basis.
Real Estate needs a fair position. This bill will cause older homeowners not to sell and get more appropreate accomadation and care for their needs. Years ago, I had many clients which were property rich and had no food.
Richard
Lenn Harley Homefinders.com MD & VA Real Estate You have to admit it has helped real estate tremendously. I believe it was changed under Clinton in his second term.
Missy Caulk-Ann Arbor- Realtor(R)- Ann Arbor Real Estate (Keller Williams-Ann Arbor) Perhaps it boils down to that 80% of real estate agents that leave the business every 2 years even in good times. Maybe it is that 20% that gets it. If they touch this law at this time, you can forget real estate as a career.
Richard Stabile Bergen County New Homes Builder Realtor (REMAX real estate associates) You hit the nail on the head.
Jim I am still amazed how stupid or naive people are. Over 50% of the citizens own stocks and houses and are falling for this slick tongue turkey.
John Walters (Specialized Real Estate) I wonder if he is really ahead at all. I believe the polls are skewed, and biased. This is totally counter to common sense.
Very well put Jim, thankfully our answer is only 2 weeks away. This market in a non-election year would be very different right now. These are very uncertain times. BTW look at my last listing post on the horse farm. (cap gains be dammed) Ask and I'll tell you why.
Keith Perry - REALTOR® -West Metro Atlanta (Coldwell Banker) I was hoping it is next week we will have our answer! LOL! Why are horse farms a better deal?
Well to answer the first we might have to fight the election out in the courts. And the second we all might need to start raising our own chickens, cattle, swine and veggies. Lest the tax mister visitith us X2 . Oh and the horse doen't cost four dollars a gallon. Strange times indeed! :)
Jim, I have definitely noticed reservations among buyers here. I agree, people will not see as many benefits to buying a home if the Capital Gains exemption goes away. I really hope that doesn't happen!!
Keith Perry - REALTOR® -West Metro Atlanta (Coldwell Banker) Keith it is strange times indeed. I could not agree with you more.
Colorado Springs Realty Patricia Beck (Prudential Professional Realtors, GRI) His own tax advisers said it. Thye are trying to say on the Internet it isn't true. It is true. There are more than one type of taxes also. Captital gains, inheritance tax, corportate, income tax etc... they try to muddy the waters talk about income tax only. Ot that Congress is really the one that lowers or raises taxes.
I don't know if you would believe any source that didn't have the Fox News stamp of approval, but Obama's website and factcheck.org both say this is a lie. In fact Wachovia had to issue an apology because one version of this lie was circulated by a Wachovia executive.
Here's the factcheck.org link if anyone's interested:
http://www.factcheck.org/askfactcheck/would_obama_tax_my_profits_if_i.html
http://fightthesmears.com/articles/9/obamaandtaxes
Also your description of getting tax-free profits of $500k "every two years" is a little misleading, isn't it? I thought the law is that, after living in the home for 2 years (out of the past 5), you can exempt $500k of profits from a sale. That's very different from what you said.
Dan - The link to the IRS rules are in the main body of the blog. Nothing is misleading to anyone that is familiar with real estate. His own tax advisers said yes!
AskFactCheck does not address the gains on sale! Re-read it!
Fightthesmears does not address the issue at all!