Page 2 of 3 FirstFirst 123 LastLast
Results 11 to 20 of 23

Thread: Rental houses...

  1. #11
    Halvecta
    [QUOTE=BADBLOWN572;2547104]Thats a big one. Per memory, in CA, you have to consider a property your personal residence for 2 years out of the last 5 that you own it to get away from capital gains. If you don't, you will be paying big time!
    It is a Federal law. California does not have capital gain tax. It is all ordinary income. The federal capital gain rates are applicable to assets held for more than a year. The 2 out of 5 thing is a Federal law that allows the first 500k of profit (married filing jointly) to be tax free. Also keep in mind, if you buy another and then sell your current one at a later time and claim this exemption, you will have to wait another 2 years beyond that sale to get the same exemption on the new one.

  2. #12
    DCBob
    All good advice, further clouding your ability to make a rational decision :idea: Fock it, sell the house and buy another boat

  3. #13
    Senior Member
    Join Date
    Feb 2010
    Posts
    474
    If I were to sell my primary residence and whatever profit I make on the sale was put directly into the building of new house and that would be my new primary residence. Would I still have to pay capital gains?

  4. #14
    2Driver
    Back away and look at it like a pure investment. You buy a stock because you think it is undervalued and is going to run up.
    Do you see housing in the same way (undervalued and about to take a big run up?)or do you think it has run its course for a while and will be a lack luster investment for some undetermined period of time? When you add up all the costs (don’t forget you will have to claim the income) that is a lot of cost to carry an investment that may not be so hot especially if you say you can barley cover the costs if something goes wrong.
    We crossed this road every time we moved. We would have made money but that was when housing was reasonable and before the whacko run ups. Besides I don’t have an ounce of patients to deal with renters. We decided to make triple payment our 30-year and be done with a mortgage in 10 years and it feels good now.

  5. #15
    cdog
    [QUOTE=BADBLOWN572;2547104]Thats a big one. Per memory, in CA, you have to consider a property your personal residence for 2 years out of the last 5 that you own it to get away from capital gains. If you don't, you will be paying big time!
    It is a Federal law. California does not have capital gain tax. It is all ordinary income. The federal capital gain rates are applicable to assets held for more than a year. The 2 out of 5 thing is a Federal law that allows the first 500k of profit (married filing jointly) to be tax free. Also keep in mind, if you buy another and then sell your current one at a later time and claim this exemption, you will have to wait another 2 years beyond that sale to get the same exemption on the new one.
    Ca has a 3 1/3% withholding tax on all non owner occupied property. They are also currently trying to pass a 1.75% transfer tax on any home sales. Thank a Realtor. They are the only ones fighting CA on this as we speak.

  6. #16
    Dave C
    Good advice on the repairs and cash flow issues for vacancies, etc. etc.
    Also look at it as a long term investment for you. That includes the cash flow.
    If you can afford it then its a no-lose situation. Screen your applicants carefully. That includes a credit check and reference check.
    You must declare the rent as income but you can deduct the interest, taxes, maintenence, insurance and depreciation against that income. Hopefully you can break-even then you will owe no income tax on the rental. If you income is low enough you can even deduct the loss

  7. #17
    cdog
    Good advice on the repairs and cash flow issues for vacancies, etc. etc.
    Also look at it as a long term investment for you. That includes the cash flow.
    If you can afford it then its a no-lose situation. Screen your applicants carefully. That includes a credit check and reference check.
    You must declare the rent as income but you can deduct the interest, taxes, maintenence, insurance and depreciation against that income. Hopefully you can break-even then you will owe no income tax on the rental. If you income is low enough you can even deduct the loss
    Depreciation is the biggest benefit. Remember, you can only depreciate the improvement (the building) by 27.5 years.

  8. #18
    nodigg
    If I were to sell my primary residence and whatever profit I make on the sale was put directly into the building of new house and that would be my new primary residence. Would I still have to pay capital gains?
    Nope!

  9. #19
    nodigg
    If there is ANY way to hang on to the old place and rent it out do so. You will never be sorry if you make it happen. Even if you have to go negative monthly you may re-coup it annually after taxes. Even in a bad rentor situatuation you win in the end. My rentors pay my mortgages for me while the values increase and I get GREAT tax advantages too. The worst meth labbers I (unknowingly) rented to have even made me money, (the value increased 100k while they were paying the rent). Sure they tore the place up and it cost me $2800.00 to re-paint and carpet and repair, who cares? I still made about 90k plus tax advantges for the year.
    Boats and toys are great but they will NEVER appreciate and buy you real estate whereas real estate will (potentially) buy you ALL the good stuff.
    Right now is the time to buy too, make lo-ball offers and sooner or later some one will be in a situation to take your offer.
    Best of Luck.

  10. #20
    totenhosen
    Nope!
    Wrong! He can only claim up to $250k tax free if he is single and $500k married.

Page 2 of 3 FirstFirst 123 LastLast

Similar Threads

  1. Haunted Houses
    By Waist Deep in forum Sandbar
    Replies: 5
    Last Post: 10-06-2007, 03:58 PM
  2. Anyone have rental houses near Redding?
    By zudnic in forum Sandbar
    Replies: 0
    Last Post: 05-21-2007, 10:19 AM
  3. houses in the keyes?
    By LLGirl in forum Sandbar
    Replies: 5
    Last Post: 09-14-2006, 03:37 PM
  4. Help with houses
    By MsDrmr in forum Sandbar
    Replies: 5
    Last Post: 04-29-2005, 11:40 AM
  5. Replies: 27
    Last Post: 09-03-2002, 03:36 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •