Thursday, January 13, 2005
Brought to you by the California Association of REALTORS®
TAX LAW CHANGES FOR CAPITAL GAINS AND CALIFORNIA REAL ESTATE WITHHOLDINGS
With the start of a new year, recent changes to real estate tax laws may affect your clients' buying and selling decisions. One significant tax law change involves properties acquired through a 1031 exchange. For these properties, the Internal Revenue Service (IRS) has imposed a five-year ownership requirement for eligibility to the $250,000 (or $500,000 for married couples) exclusion from capital gains taxes. In a separate move, California's Franchise Tax Board has eased its real estate withholding requirements by no longer requiring one as long as a seller's last use of the property being sold was as his or her principal residence.
Here's a hypothetical situation to illustrate how these new rules work. Let's say, in 2001, Tami Taxpayer acquires a rental property through a 1031 exchange, and then, in 2003, she moves into that property as her primary residence. What are the tax consequences if she now sells the property in 2005?
First, even if Tami has lived in the property for two of the last five years, she may not qualify for the $250,000 exclusion from capital gains tax when selling her home. As of October 23, 2004, a taxpayer who acquires property through a 1031 exchange is not eligible for the $250,000/$500,000 exclusion for the first five years of owning that property. Here, Tami is not eligible because she's only owned her property for four years. For more information about this rule, C.A.R.'s Legal Department has recently updated its legal memorandum titled Capital Gains on Real Estate Sales.
Second, despite this potentially onerous tax liability, Tami is exempt from the requirement that 3 1/3 percent of the sales price be withheld from her proceeds. As of January 1, 2005, a new exemption from the California withholding requirement is available for sellers whose last use of the property was their principal residence, regardless of the two-of-last-five-years requirement. For more information, go to C.A.R.'s newly revised legal memorandum titled California Withholding on the Sale of Real Property . In addition, C.A.R's updated standard form "Seller's Affidavit of Nonforeign Status and/or California Withholding Exemption" will be released shortly.
Realegal® is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 155,000 REALTORS® statewide.
Thinking about Buying or Selling Real Estate? We should Talk Call David Lee Walker REALTOR ® 805 - 377 0897
Search ALL Ventura County Home Listings: Foreclosures, Condos, New Homes, and More.....
View Prices, Maps, Photos, Virtual Tours, with Addresses!
Just use your name, email and valid phone as your Password - then click the "Free Instant Access!" button to enter. (Use the same Password when returning. All information is keep 100 percent Confidential) Allow the next page a few seconds to load.
We hate spam too! Your information will be kept 100 percent Confidential.
David's Golden Real Estate Quote of the Day
"The charm, one might say the genius, of memory is that it is choosy, chancy and temperamental; it rejects the edifying cathedral and indelibly photographs the small boy outside, chewing a hunk of
melon in the dust." - Elizabeth Bowen
Real Estate Listing Data Updated Daily
Website Last Modified on Wedensday September 19, 2018 7:45 AM Day 262 of 2018 71.7 103 Days Left in this Year 28.2
Today's Sunrise 6:42 AM PDT - Sunset 6:59 PM PDT at 34 10' Latitude
Daylight: 12 Hours 17 Minutes, 2 Minutes Less of Sunlight than yesterday.
Over 8 Million Pages of this website were Viewed by Almost 3 Million People Since January 2, 2000
Since January 2, 2000, 8,020,028 Pages of this website were Viewed by 2,964,916 People
Yesterday 410 Pages were Viewed by 226 Possible Buyers or Sellers So What Does that Mean to You?
All sales data is from many sources and is believed to be accurate but is not guaranteed. All Sales that are shown involved other brokerages both on the selling and listing side. Any involvement by Condohouse Realtors is clearly stated and highlighted in RED. David Lee Walker, real estate broker is qualified to advise on real estate. David Lee Walker does not offer legal advice or tax advice. If you have any questions concerning the legal sufficiency, legal effect, insurance, or tax consequences regarding any real estate or other matter, please consult with your attorney, accountant, insurance agent, tax or other appropriately qualified professional. The Sales information referenced to in this Web Site (CondoHouse.com) has been Provided by the Ventura County
MLS Corporation's MLS as of the current Date. The listings and Sales are NOT exclusive to CondoHouse Realtors and may have been Represented by other Brokers. Display of MLS Data is deemed reliable but is NOT guaranteed accurate by the MLS. The Information contained on this website (www.condohouse.com) is believed to be accurate but is not guaranteed. The MLS Data and information being provided is for
the consumer’s personal, non-commercial use and may not be used for any other purpose other than
to identify prospective properties consumers may be interested in purchasing. Any link is for informational purposes only and is not a recommendation nor an endorsement or guarantee. This Information is to be used as a reference and any questions that you may have should be directed to the appropriate Real Estate Agent. If you are interested in any of the properties contained within this website, please contact the appropriate Real Estate Agent. If your property is listed with a Broker, this site is not intended as a solicitation of the listing. The property offered is subject to prior sale. David Walker, REALTOR ®, or CondoHouse Realtors nor Ventura County Coastal Association of Realtors ® or Conejo Valley Association of Realtors ® cannot be held responsible for any Errors or Omissions that may have to occur upon the Publishing of this Information. More Disclaimer By submitting your Email address you are consenting for David Lee Walker REALTOR ® to contact you even if your name is a "Do not spam List". By submitting your telephone number you are consenting to David Lee Walker REALTOR ® contact you even if the number is on
"National Do Not Call Registry".
For Ventura County Real Estate Information Call CondoHouse Realtors CalBRE #: 01124599 805 377 0897
David Lee Walker REALTOR ® California Bureau of Real Estate "Responsible Broker License" #01124599 Lisa D. Walker REALTOR ® California Bureau of Real Estate "Real Estate Salesperson License" #01931096 The Father - Daughter Team
805 - 377 - 0897 E-mail firstname.lastname@example.org
This site, built, maintained and updated by David Lee Walker REALTOR ®