We’re selling our home. What will we owe in taxes?

Q. Can you help me determine tax liability on the sale of our home? My husband and I have owned the home for 25 years and we are doing a cash sale to a contractor. We paid $112,000 and we have $74,000 and $10,000 loans on the house. We are selling it for $175,000. We are seniors and will rent in the future. What is our federal and state tax liability and what happens with the exit tax?

— Selling

A. Good news.

Based on the information you provided it does not appear that you will have to pay any tax on the sale of your home.

Subtracting from the selling price what you paid for the house ($175,000 – $112,000) equals a $63,000 gain, said Howard Hook, a certified financial planner and certified public accountant with EKS Associates in Princeton.

You can also subtract from the gain any expenses

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How Short Sales and Foreclosures Affect Your Taxes

Whenever you sell a home, you need to calculate your capital gains to determine whether you owe any tax. If you engage in a short sale or your mortgage lender forecloses on your home, the Internal Revenue Service treats it just like a sale. Foreclosures and short sales may also require you to recognize ordinary income if the lender cancels any of your outstanding mortgage balance and you’re ineligible for an exclusion.



a sign in front of a house: How Short Sales and Foreclosures Affect Your Taxes


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How Short Sales and Foreclosures Affect Your Taxes

Short Sales and Foreclosures

Both short sales and foreclosures are usually the result of a borrower’s inability to continue making mortgage payments.

A short sale is where your mortgage lender allows you to sell the home for less than your outstanding loan balance and cancels your obligation to repay the remainder of the loan.

With a foreclosure, the mortgage lender will take possession of the home if

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Which U.S. States Charge Property Taxes for Cars?

Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.

Q. I’m a new resident to Connecticut and I hear that I have to pay property taxes on my vehicles. Is this the only state that requires that?

A. Connecticut is not the only state that requires residents to pay property taxes on vehicles, but it may come as a surprise to someone moving from a neighboring state—such as New York—that does not have such a levy.

In Connecticut, the tax is collected by towns and cities, according to the State of Connecticut Department of Motor Vehicles. Taxes are charged whether or not the vehicle is registered.

More: What Would Overturning California’s Proposition 13 Mean for Property Taxes?

Motor vehicles are assessed at 70% of average retail value, as determined by the local taxing authorities, according to the state. The uniform

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10 Frequently Asked Questions About California Real Estate Property Taxes

We only own property inasmuch as we can pay the legal taxes applied to it. Here are the ten most common questions you should know the answers to if you own property or plan to someday own property.

1. How is Property Tax Computed in California? Annual property taxes will usually be from 1% to 1.25% of the sales price of the home at purchase.

2. Can Property Taxes Go Up Annually? Unfortunately, the answer is yes. In California the maximum tax hike on property is 2% of the previous rate.

3. When Do I Have to Pay Property Taxes? Property taxes are paid twice a year. One is billed in February and is due by April 10 at the latest; the other is billed in November and is due at the latest by December 10

4. What Happens to the Tax I've Already Paid this Year if I Sell … Read More

Escrow And Your Property Taxes

Escrowing property taxes is very common in the United States. Here you will learn how it works and whether it’s an option for you.

What Does It Mean To Escrow Property Taxes?

Escrowing your property taxes is a simple concept and useful tool for many property owners. When you escrow your property taxes, your lending company will assess you an extra amount over and above your mortgage payment each month. The amount and the fact that it is to be escrowed will be clearly delineated on your monthly mortgage statement. These payments are placed into an escrow account where they accrue and remain until it is time to pay your property tax bill.

Over time, you will have paid enough in small amounts to cover the taxes. When tax bills are mailed out, your mortgage company will receive the actual bill and will pay it on your behalf. You will … Read More

Are Property Taxes Fair?

Property tax is probably the fairest tax collected by municipalities. However, it is also probably the un-fairest tax collected by municipalities.

The state where an individual lives determines how much they pay, which may be higher or lower. An individual's economic status can also be a factor in how this type of tax impacts their pocketbook.

In fact when it comes to the decision on taxes and renting versus owning, this may be the only time renting is the best option. States collect property taxes on:

  • Land
  • Improvements to land such as additions to property
  • Man made objects that are not stationary structures

It is usually assessed by individual county tax collectors in each state. Land and property are mailed tax payment notices that are the result of appraisals of the property's value. Notices of assessments can be disputed by contacting the tax collector in the land owner's county, and … Read More

Methods to Lower Property Taxes

Owning a home is expensive as property taxes can be extremely burdensome. Annual property tax bills tend to rise steadily over time. Even if you pay off your mortgage, the taxes keep coming. Most homeowners do not realize that they need to pay less and do not understand how their taxes are calculated. Most households take their tax assessments at face value, and, most of the time, their property is over-assessed.

Here, we provide a few tips that you can follow to challenge your assessment and save money.

1) Understand the process

Local governments send assessment notices in the first few months of the year, although the schedules may vary. The notice provides the details of the contact you need to contact in case you disagree with the assessment. It also provides the details related to making an appeal, and a specific time frame is given during which you can … Read More

How To Minimize The Impact Of High Property Taxes

Property tax is a form of tax that is directly levied on all types of real estate property. These taxes can be really worrisome for the property owner, as they tend to rise steadily over time. Since people usually take a mortgage for their property, an added charge that increases with time is a further inconvenience. Instead of worrying when tax time rolls around, here are some steps you can follow to minimize the impact of high property taxes.

Limit Curb Appeal

Property tax is levied on the assessed value, which is determined by a tax assessor. The assessed value is calculated taking in various factors like the attractiveness of the house, comparison with neighboring houses, and also the general vicinity. So to ensure that your assessed value remains reasonable, you can avoid any fancy surface alterations, as this ensures that your house doesn’t appear too primped-out.

Avoid Structural ChangesRead More

Which States Have The Lowest Property Taxes?

Selling your home with out utilizing a real estate agent is just not difficult however as many buyers as attainable have to know that your property is on the market if the process is to be a success. In the course of the time, the owner should pay the back taxes and penalties as well as the interest on the winning bidder’s investment and bail the property out of taxes. Now, a variety of our resort help lives communally in “three bedrooms, sleeps twenty) kind apartments and houses.

Beginning your personal foreclosures cleansing service will mean you can reap the benefits of this steady market for beginning a new business, regardless of that the financial system is tightening up with lack of credit, loans and jobs, you can start a lucrative enterprise cleaning foreclosed homes if you realize what your are doing.

There is no such thing as a extra … Read More

Can You Deduct Prepaid Property Taxes?

Actual property has a number of distinctive characteristics that affect its worth. You may get an idea of the market worth of the property in comparison with different distressed properties within the space utilizing this method. Property (Real property) value are going down in America. By ready till after the tax sale, those who can pay off, could have.

As you might be probably aware HUD’s REO Stock is handled by a Contracted Actual Property or Property Administration Firm which are known as Maintenance and Management (M &M) Contractors. You might also ask the true estate agent or the vendor for a due diligence guidelines.

Within the UK you might get price data for properties bought from a variety of free websites or you possibly can pay for it from Land Registry. 3. i tried to ask my real estate agent to view the unit and take pictures of my … Read More