How To Avoid Paying Taxes When Selling Your Orange County House

Are you thinking about selling your Orange County house? Depending on your property, capital gains taxes may become a factor. However, there is a way to defer your taxes! Learn how to avoid paying taxes when selling your Orange County house in our latest post!

You might be excited to sell your house for a big profit, however, Uncle Sam is always looking for his cut! Capital Gains are assessed based on how much you paid for a property and what you actually end up selling it for. Capital Gains taxes aren’t just found in real estate. They are also assessed on things such as stocks, bonds, cars, and boats. When it comes to real estate, there are many exclusions you can take advantage of before having to pay. Capital gains taxes kick in when:

  • You are single, and make more than 250k profit on the sale of a home
  • You are married, and make more than 500k on the home

That said, it is important to keep all of your home repair receipts as this is added to what you paid to determine the cost basis – or the actual amount of money you have put into the property before selling it.

These numbers might sound far-fetched, however, a home purchased years ago for $150,000, that sells for $550,000 today would easily fall into this category. In order to defer the amount of taxes you owe, you will want to do what they call a “1031 exchange.”

What Is It?

You might have heard of a 1031 exchange in the past, but do you know how it works?

A 1031 exchange occurs when you reinvest the proceeds from the sale of one property into another property. In doing so, you will be able to defer the amount of capital gains taxes you owe. The process is fairly simple and used by investors all of the time in order to defer property taxes they owe. There are a few qualifications that must be met, but in doing so you will be able to save yourself thousands of dollars.

To Qualify

The qualifications of a 1031 exchange are pretty standard. You must have lived in the property for at least 2 of the past 5 years and it must be your primary residence. You will not be able to use it if you have claimed this exclusion on another property within the past 2 years or if you have purchased another property using a 1031 exchange within the past 5 years.

In addition, the property you purchase must be of like kind. This is a pretty broad term. You can sell a piece of land and reinvest in a house. Or maybe you want to sell a duplex and buy land to develop. Any of these options will fly.

At H&M Realty Group we work with 1031 exchange customers all the time! We are professional investors and property sellers who have a wide array of properties available at any given moment! Our inventory changes daily, with many types of properties to choose from. If you are looking to avoid paying taxes on a piece of property you wish to sell, we are here to help you with a solution! We will walk to through the entire process, saving you thousands of dollars along the way!

Are you ready to sell a Orange County house? We can help! Send us a message or give us a call today! 949-625-4533

Joe

Broker/Realtor/Investor/Mentor (41 years experience) Specialties: Buyer's Agent, Listing Agent, Foreclosure, Short-Sale, Property Management, Landlord I'm a Full Time Real Estate Professional, house flipper and mentor to many of my clients. I am here to help you get top dollar for your home or get you the best price for a home that you are going to live in. I have over 40 years of real estate experience for you to draw on and actively list and sell over 20 homes a year. I have sold over 600+ homes in the last ten years alone. I am a very skillful negotiator and will work diligently to help you realize the best possible price when buying or selling your home. With my Exclusive Home Acquisition & Sales System, I can find the Right Home for You! I have access to homes no other Realtor will show you. I can show you how to save an average of $10,000.00 on the purchase price. We will find a home that fits your needs, in a neighborhood that suits your style. If you are selling your home then I can bring all the professionals to you. I always include professional photos in ALL my listings. I have contractors standing by to assist with those upgrades if needed. I can also quickly get you ALL CASH offers for your home if you desire. My marketing surpasses all other agents. It begins with extensive internet advertising to hundreds of websites throughout the world. I do direct mail marketing for you home and also knock on doors in your neighborhood when I am holding an open house. I hold you home open to expose it to as many buyers as possible. My Exclusive program is designed to sell your home for Top Dollar in Any market. I am an experienced flipper here in Orange County and therefore can offer you my over 40 years of real estate experience. The information is available to you at no charge! If you like what you see, please call me and setup Your Free Consultation.

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