OK…so when I sell this dump(see website below for anyone that doesn’t know me) I thought we’d rent for a year then take ALL the money from this house and flip one house after the other for a year. Problem is Capital Gains taxes.
As a side note: You never see/hear anything about that on TV shows like “Flip This Houses”. DUH!!
Matter of fact you never hear about any other costs/fees like bank costs, filing fees for work being done, closing costs etc etc.
So how do these people make money doing it? Being taxed 40% seems to make it a pretty prohibitive venture.
AndI hate being a landlord…been there, done that.
Only thing I can think of is instead of flipping a buncha cheap ones over a year is to buy one real expensive one that needs a lot of work at a good price if I look real hard (again), live in it while I work on it like I’ve been doing all along cept’ sell it in two years to avoid CG tax and not even consider staying. Katrina is a broker of almost 20 years and you know what I do besides make trouble.
Any other ideas?
Be well
andy…
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My family built a new house and sold it every two years. We would move in with stud walls and mechaicals roughed in thats it.
Eat out of microwave and move your air mattress room to room while sheetrock and paint was being done.
During the day I would go to school and after I would work until dinner, summers I would work all day. When I got older the punchlists were left to me, I had to meet inspectors at the house, and help unload material deliveries.
My parents made alot of money doing this. I found out what I wanted to do in life, be a carpenter.
Not sure if this is something that you be interested in but it worked for us.
If you look at my website below you can see the last two I did.
The Goose Hill project is the one I'm 99% finished with.
My next project though...I'm going to look to do more cosmetic work than the extensive work I've been doing on these.Gettin' too old to keep living on piles of plaster debris and Katrina might kill me if I subject her to that any more.
Actually, what would be ideal is a house that has a corner we can live in real comfortably while I work on the rest of the house. These past two houses were like living in a war zone and I ain't kiddin'!! AT ALL!
The Fox Hunt project in my website below....I lived (if you wanna call it that) in the corner of the basement while DW and DD lived at her friends house. I pretty much tore the entire house down cept for two walls...with me in the basement like living in a tomb...lol. Wanna talk nightmare??? But it got us here. Whewwwwwwwwwww~~
http://WWW.CLIFFORDRENOVATIONS.COM
Buy a small house thats decent and put some additions on it. 1 possibly 2 additions.
Finish the additions and move into one of them, then gut the house.
Look for a good neighborhood and a small house with a big garage.
buy a nice mobile home for an "on-site office" sell it when done with it.
When you're this good, EVERYONE wants a crack at you!
http://www.petedraganic.com/
Buy a small house thats decent and put some additions on it
I'm looking into something like that right now. There is a small 2 br ranch, maybe 960-1000 sq ft that is for sale in a really nice neighborhood. Been thinking of the Dieselpig add on, Put a second story on the place, make it a colonial or cape and either sell or move in for two years.
Ever since I spent time in Austin Tx I have thought that this would be one thing that will continue to do well in terms of investments. Fliping houses doesnt appeal to me for the reasons that Andy mentioned in his initial post, there are all kinds of expenses that they fail to mention which makes the profit margin almost disapear once sold.
Doug
I had a plan one time .
DW wanted a new house built .
I said I would .
I said IM gonna build a three car garage first detached . Im gonna put a kitchenete and a bathroom in it .
I lost my audience . Why does a man lose an audience in his finest moments?
Tim
I lost my audience
Aint that the way it always goes! People just dont recognize a good idea when they hear one.
You mentioned the way that your dad did the basement first, moved down there and finished the upper part of the house, I have an uncle that did that, several times over. Worked well for him. He even layed the block for the basement.
Doug
He laid the blocks too . He wouldnt hire shid.
The families helped each other frame . They fed each other but didnt pay shid. I didnt help much though as I was little . Big brothers took the main part of the load . It sure paid to be little . When I got bigger he was paying me for the same stuff they did for free.
Tim
my father did it the same way as that...
enough of that crap...Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
Yea, I say this flipping and rental property is similar to owning milk cows, you gotta be there every day! I dont like to be anywhere everyday.
It works for some but I dont want to be married to my work.
Doug
That plan worked for me and the wife - albeit with some wrangling with the A-thor-tees that this was not "2 residences on one property in an area zoned single family residential".
In fact, still living in the garage/guesthouse right now. Perhaps 2-3 weeks from our CO.
(by the way, I have not posted pics, but I did fix those stairs and put in a proper set of 3 winders - don't know if you recall that thread or not)
http://jhausch.blogspot.comAdventures in Home BuildingAn online journal covering the preparation and construction of our new home.
I dont recall it . Too may since then. <G>
Tim
Andy, if you've lived in the house for two of the last five years, you do not have to pay capital gains taxes.... your exemption does have a life-time limit of maybe 500k in profits....
This may change or have changed but as of last tax year I believe it was current and my recollection is fairly accurate.
When you're this good, EVERYONE wants a crack at you!
http://www.petedraganic.com/
" your exemption does have a life-time limit of maybe 500k in profits...."No lifetime limits. You can do it every two years. Again, and Again, and Again. But I believe that is what the spousal unit is complaining about..
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Andy, if you've lived in the house for two of the last five years,<<<Pete...yeh I know that. thats what I said...instead of buying a bunch of smaller cheaper houses and flipping them all as fast as I can my second plan was to buy one like the one I'm in now and do what I did here (live in it) but only stay "two" years in it. I probably could make the same dough doing one expensive house like this than a buncha smaller ones with less hassle but I didn't really wanna hang out for two years was all. http://WWW.CLIFFORDRENOVATIONS.COM
I know of a couple of expensive ones out near me if you are interested ;-)
I know of a couple of expensive ones out near me if you are interested ;-) <<<<<<<<<<<<<<<<<<<I said a "good" deal.
Plus I'd hate living out there...if you know what I mean : )
You'd hate living out there too and you live there...lol (part time) http://WWW.CLIFFORDRENOVATIONS.COM
I said a "good" deal.Plus I'd hate living out there...if you know what I mean : )You'd hate living out there too and you live there...lol (part time)
OTOH, If you could get TGNY to move out, the property values would double!Semper Fi
"To be young and a conservative, you have no heart"
"To be old and a liberal, you have no mind"
Winston Churchill
"Some people spend an entire lifetime wondering if they made a difference. The Marines don't have that problem."PRESIDENT RONALD REAGAN, 1985
This may be a dumb question, but I don't think anyone else has covered it yet.Why are you determined to LIVE in the houses you're working on? Why not stay where you are while you renovate a house elsewhere?If you're determined to avoid capital gains, you could always move to the renovated house AFTER you've finished it and spend your 2 years there.It sure is nice to have a clean house to come home to. Might keep your Wife happier. You'd be more "separate" from your work, instead of having it right in front of you all the time.Just a thought.......
You can lead a man to knowledge, but you can't make him think
If you're determined to avoid capital gains, you could always move to the renovated house AFTER you've finished it and spend your 2 years there.<<<<Cause I need the money from this one. thats how I've been doing it.
Your plan is what my plan would be on the following one.
Its gonna take one more of these. http://WWW.CLIFFORDRENOVATIONS.COM
You could stay where you are and borrow the money against the one you are in. Interest rates are cheap. Borrow, renovate the next one, sell the current one to pay the loan off, move in for two years, repeat.
Leveraging is also a good way to get into trouble...if the market changes...if something takes longer or costs more...
Leveraging is also a good way to get into trouble...if the market changes...if something takes longer or costs more...<<<Exactly right. And I'm moreeeee than willing to take calculated risks but not act stoopid. As it is I've borrowed to the max which is fine. Its been figured in from the get go, but as I said...I'm not looking to get stupid about this.
Thats why I'll probably sell to do more while these creaky ol' bones are still willin' to : ) http://WWW.CLIFFORDRENOVATIONS.COM
Market risks have to be one of the many risks considered if you use a Home Equity Loan of Credit to finance a venture. You have to be able to carry at least the interest payment on the HELOC without going into the negative on your monthly finances for almost indefinitely.
A lot of people don't figure the risks (I think that's why you pointed it out) when all they watch is the TV shows that leave out sooo many of the other costs of flipping & financing of flipping (loan costs, insurances, closing costs, atty fees, etc...). Anyone considering HELOC needs to talk to the bank about how to minimize their risk exposure (especially the risk on their own home) before getting started. There are ways if you go looking for them.
Well John , I dont think paying taxes on income is such a shy off conclusion. Even at 40 percent . Not on you but several have mentioned the same thing .
If I had a deal that I could make a million profit in a week , I sure would not mind sharing 40 percent of it .
Sure thats extreme , but if 40 percent is the expense of the profit , [not the job] and we take the rest of the expenses to be included in we will see that there will be deductions and the end result will be that its not a 40 percent check to the goverment . If the job is figgured like any other one has to be it could be passing on a very good pay check.
When we work for the public , its the same deal. Last I was told it was 49 percent including SS. Its the same thing . So since we are taxed so heavily, should we not work for the public? Makes about the same sense to me . Why go to work if I can draw an unemployment check? Hopefully Ill make more money and I know the time off will be limited anyway. The fact is we dont pay in 49 percent of contract labor as it has deductions . The actual percentage is much less .
Tim
I don't see taxes as a risk either, just the cost of doing business but something that the TV shows never show. I've never had to pay 40% either but I've also never kept a property as long as a year to get the 15% rate. Even if I did have to pay the full 40% I sure could make a lot of money with that before I had to pay it out.
I have an Excel sheet in my PDA that has the fixed costs laid out as well as a few percentages that all I have to do is enter the comp price of the property and it tells me what I should pay no more than and a repair budget. I can't work these things in my head, never had a fast enough processor (my brain's still running on a 486 processor) so I rely on the computers.
There's more I want to write but not enough time now.
There's more I want to write but not enough time now.
Id be interrested in what you have to say so when you get the time , I know I would appreciate it.
Thanks ,
Tim
I’ve learned a lot from your posts, so I’m bit honored that you’re listening (not to be sucking butt either, though). Not sure if I'm saying anything new but it may benefit others. But as you said in another post somewhere about the Landlord Association, you can learn as a group much faster than as an individual. <!----><!----><!---->
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For starters, I get 10% to 15% from AG Edwards without even working. Risk? Yes. Some people see this kind of risk (stocks, mutual funds) intolerable but I see it as manageable (a good broker (or whatever he’s titled) helps a lot too). So my yield target on any investment property has to be a lot more than that to make it worth my effort. If I for some reason break even on a project, I in fact lose money; that 10-15% from investment. Any profit less than that 10-15% is a loss. <!----><!---->
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I know a guy that does his own title search in the desire to save money. I see this risk as incredibly high & intolerable. He claims he’s saving money by doing it himself. Maybe he is, but I don’t see the need to take on that risk when I can pay a set fee to a Dirt Attorney that will 1.) do the search for me and much more thoroughly than I (and probably better than the guy that does it for himself); 2.) Provide Title Insurance; 3.) be the responsible party if something does indeed screw up (accepts the risk); 4.) Represent me in the event of a dispute. (I listened to this guy on a conference call re: a property I sold, the buyers atty claimed I didn’t have clear title and my guy ate his lunch with all the details that the buyers atty (probably his people) missed and gave page refs to the locations of the missed deed trasnfers etc, in the county books. He’s a tiger and good guy to have on my side.)<!----><!---->
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I expect, no not expect, demand that the realtor move off the standard 6% take if I’m re-listing through them on a flip. This is something we discuss prior to the purchase of the project. They made cash on the sale and will make even more on the resale after I improve the property and bring it up to competitive condition. Part of my Excel Calculator shows me what the real-estate company is taking, (I know this may or may not be what the realtor is getting). I find it’s good to know what they’re getting, especially when they’re taking such a large percentage of my possible profit. (A friend of mine that does this in Tampa solved some of this problem, he married a realtor.)<!----><!---->
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For financing I use a HELOC to get the ball rolling and figure on paying only interest on that. The HELOC buys the property outright so I have the title/deed in my hand. My bank (good to have a bank on your side) will give me 80% of what I paid for the project on an equity loan using the project property deed as collateral. I use that money to pay down the HELOC on my main home thereby reducing the risk to my home to a manageable level. The project property then carries the majority of the risk. Not sure what I’m going to do once I accrue enough $$$$ from the flips to pay cash. I’ll have to see what investing it does Vs the cost of the loan. If things turn sour on the project I’ll be able to pull the cash from investment to clear any loan incurred for the project. <!----><!---->
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I do some work myself and the stuff I suck at or don’t like, (or not licensed to do (HVAC)), I farm out. I do the initial cleaning which sucks but I get a very clear idea of the true condition of the property. I do a the final cleaning (still sucks) when all the work is done so I can get a clear idea of what I’m selling as well as how the subs are doing. <!----><!---->
<!----><!---->
Some people don’t pull permits for the work. To me that’s a completely unnecessary risk. Come on! It’s your business and why put it at risk by not following established legal procedures and code? How much is saved by avoiding the BI vs. how much is being put at risk? Far too much for me to not follow the P & I process. <!----><!---->
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I’ve not been through as much as you have and been at this for only 2 years or so but I spent a lot of time on ciphering & re-ciphering the numbers to be sure I was as educated about as many aspects of the project as possible. TV shows won’t show this aspect since there’s no glamour in it. But how much glamour is in losing money? I’m really suspicious of the TV shows, too many stupid mistakes that a little forethought would’ve addressed. <!----><!---->
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All of these costs are the cost of doing business and take money from the profit but they also reduce your tax responsibility. <!----><!---->
<!----><!---->Now, it’s off to the slopes to teach my 4yo to ski.
For starters, I get 10% to 15% from AG Edwards without even working. Risk? Yes. Some people see this kind of risk (stocks, mutual funds) intolerable but I see it as manageable (a good broker (or whatever he’s titled) helps a lot too). So my yield target on any investment property has to be a lot more than that to make it worth my effort. If I for some reason break even on a project, I in fact lose money; that 10-15% from investment. Any profit less than that 10-15% is a loss.
Thats an exellent way of looking at it but you see I didnt know that because Ive never invested that way.
I read where Piffin said he could do somthing like that but hes the first I believed. I dont know why except gamblers dont mention the money they lose . Fisherman , well you get it . Now you tell me you can which I believe , but I wouldnt say I can and like everyone arent lanlord material, or flippers.
I dont believe the home reality flipping shows and argue with DW over it . She bought it lock stock and barrel. I fail to see a knowledge base from the "stars" . I think I will be a state trooper next week cause I think the blue lights are cool.
Im always interrested in what anyone has to say about this business . I listen to Blue . <G> I like Blue actually. Ive been reading Blue for years.
You are right , stocks would be a lot easiar. .
Tim
Edited 1/16/2007 8:16 pm by Mooney
Well, I would be careful about stock return figures. Everybody remembers the good years. Or the times they won $1000 at the tables. They forget the losses. Last year I got 14.1% on investments. Pretty good year. Very happy. But I do mostly Index Funds.
But go back over 10 years and the return is 7.78%. Very close to what the gurus say the Stock Market should return. Course I'm in Index Funds so there is always that 1 Fund out there. I'll take my chances.
Maybe john is doing well with AG Edwards but he's got a strong headwind with the loads/expense ratios on AG Edwards funds.
The returns I quoted from AG Ed were after fees and whatevers they charge (which aren't that bad considering some of the others). None of them do it for free. The rates are for the last 2 years. I was in more conservative before that where 10% wasn't an issue and easy to get.
One of the old guys said at the coffee shop that he does better with stocks than he does his rentals.
He has a shack of a rent house that I would not work on and a metal building he rents to the Salvation Army. 1100 per month for both I think.
That told me he makes greater than 1100 per month on stocks but I dont know how much money hes got in it .
He got a no down offer to sell and carry the note . His only thought if he took it was to invest it in stocks . Hes 82 yrs old .
That told be that for as conservative a 82 yr old is and hes tight as bark, that hes comfortable in the stock market . He might know somthing .
Tim
>A lot of people don't figure the risks (I think that's why you pointed it out)Yes. I had a rather small HELOC going before just selling my house. They're seductive. When planning to sell, I calced the money going out (through the loc) versus the money that would be coming in (through even conservative investment) and was taken aback by the difference, and the month after month cumulative effect. It sneaks up on you, kinda like a dripping faucet will fill a bucket before you know it, and, completing the analogy, you'll be drowning in debt.When I paid off the prior loc, bank offered me a loc on the new house. My literal answer was, "Hell, no!" To be fair, they introduced it with, "You'll probably say 'no' to this, but..."
We live in the same house as we started and had our kids, I always felt it was very important for my kids to have there own bedroom and school to be grounded, Im not critizing anyone eles here every familys different, I know of one family all the kids are messed up, they always had people walking trough there rooms as the places were always for sale, Money wise its good to stay fix and sell but theres more to the bigger picture sometimes
Others have posted same, but the garage/guesthouse worked for the wife and I. Still living there now. Hope to have the CO on the main house in 2-3 weeks.
You just have to make sure the local codes (assuming "single-family residential"-type zone) allow for the guesthouse or servant's quarters. We fought a battle of "this is not 2 residences on one property" battle.
Then you can start your 2 year clock earlier and really "be there".
If you go back far enough in the blog archives you can see the garage/guesthouse pics.
Then again, I do realize that out here in the upper midwest and in semi-rural areas, land and large lots outside of subdivisions are a bit easier to come by.
I think you'd fit in just fine out here. . . . .they call Madison the Berkeley of the Midwest.
http://jhausch.blogspot.comAdventures in Home BuildingAn online journal covering the preparation and construction of our new home.
Andy,
Ive tried several different things in my life . By my expectations I failed with two retail busineses as it didnt support my family.
After that some one and I dont know who said go with what you know . Wish I remebered who it was but I guess it doesnt matter .
Dad had trained me to do it all and what he couldnt teach he hired someone else to send me out with and I didnt stick with it but I still had the education.
Im right back to doing it all or practiceing it as I dont think anyone is ever an expert at this stuff because I still learn every day it seems .
I do finish carpentry but Ill never be a Stan, and Ill never be a Desielpig. Blue has more years behind him framing than I have to look forward to. Others have more experience contracting than I will ever have and so the story goes.
I do have more experience in other things than anyone else here that I know . That wont buy a cup of coffee but it does match what Im doing . I wouldnt at my age try to do what the others I mentioned are doing but I would hold my own at what I know so well.
Listening to your posts in this thread alone reflects the same thing . You are gonna run the ball and call the plays that work and travel on. You wont make big mistakes and you wont gamble . You have a goal and so far you are dead center of it to making it happen. You will do fine .
If I was up there where you are I would stick out like a diamond in a goats butt , but more like that part of the goat. Im sure I wouldnt belong there and wouldnt know it like I know my den trees here. In my mind your greatest strength is where you are with your wifes knowledge of her profession and of the area. Since you asked , I think thats your home field .
You will be fine as you have been. Good luck, cause we always need that.
Tim
life-time limit of maybe 500k in profits.... <<<<
Pete,
There is no longer a life time limit.
"Being a cowboy aint all ridin and shootin" - Tim Mooney
Have you thought about duplexes or the old double house?
Live in one unit, renovate the other, reverse when done.
My Dad did the same thing but he built a basement first for us to live in while he framed the house above.
Tim
The third home we did was like that, we moved into the basement when the floor joists and sheathing were on. Spent a winter in that basement while the house was framed.
The previous house sold to fast, thats why we ended up in the basement.
The following house we had enough time to to get the foundation and a detatched garage built before the previous one sold. I was 16 at that time and stayed with some friends until it was framed.
My parents figured the house would be on the market for a few months then it would sell. That would give them time to get the next house roughed in. Problem was the house would sell in a week or two. LOL
Dad bought half of a street once that had been used for cows.
He must have had some money ahead cause we were living in one new one building the next one beside it . Every single time the one we were living in sold . We always had to wait to close till we could move into the next one . My step mother and I moved clothes on hangers across the front yard all the way down the steet through 6 houses not one time selling the newest one .
Tim
And here i thought you were gonna say sleep in a finished room.
Sad part was about the time the house was finished it got sold.
Consider this: (At least for the time-being) capital gains rates are far below most folks' income tax rates.
Andy,
24 months principal residence.
The builder I originally apprenticed for did this. I always wondered why he had a mailbox at the property the day he bought it...............
Get it?
[email protected]
It's Never Too Late To Become What You Might Have Been
Buy less of a house and the capitol gains wont be 40 percent .
Probably would be on the pad you have now .
You have to live on LI? Thers cheaper places to camp . But you knew that.
Tim
"Buy less of a house and the capitol gains wont be 40 percent .:He misstated it.Capital gains arn't the problem.It is earned income.In a case like this it would be treated a earned income (self-employeed or the equal if an LLC).That means that it is both treated as ordinary income and also self-employeement taxes..
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Unless he kept it how long?
Tim
You are getting into a gray area.If he just holds (or rents) and does minimal work and hold it for a one year then it become long term capital gains. IIRC the tax ran for LT CG is 15%, 10 for people in lower tax brackets.But if his "business" is repairing and flippy house then it is busines income even if it takesn him several years.In fact just flippy house can be business income if that is your "business". And even if one lived in it as their principle residence and tries for the exclusion then it is even possible that if it went to court that it might be treated as business income. But I really don't know. In fact if the sales price is less than $500k (married) then there won't even be a 1099 issued (if the title company knows that you qualify) and thus the IRS won't even know.For the other cases there are probaly tax rulings and tax court cases on the difference, but I don't know what they are.The random flipping so one (ie, the IRS) would not know. But you have no other income some and 5 houses flipped in a year shown as capital gains (either LT or ST) then they might start asking questions..
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Thanks for the ruling on the field .
There is sufficient evidence to over turn the call and Mooney wont be charged for a time out . 1rst and 10>
Tim
Bill...you have it right. http://WWW.CLIFFORDRENOVATIONS.COM
A reality check on flippin' comes from the guy who fixed my cable yesterday. He'd been flippin' for 5 years, then got into two houses that took a little extra work and have now taken extra time to sell. He's used up all his funds and had to go back to work for the cable company to cover his nut.
Cloud
Well, I'm gonna have to work for clients again before I sell this one..ugh...but thats OK as long as I make money all around...
I don't plan on taking any serious chances or look to make mega bucks on smaller/cheaper houses. Doesn't look like I can't do that anyway due to CG so one house for big bucks may have to be the way I go. I just won't care this time if I love the house...just be concerned that I can make the dough from it. I'd even do a contemporary...eeeeeeeeee (did I just say that..lol)Hopefully though...I can find something I do lov...like enough to keep me happy working on it for a cpl of years.
Hey...I started with my first house at $85,000 here in CSH and went through four more before I got to this one and now this one'll go for some pretty serious money (for me) "I hope".
I'd do this somewhere else off LI but I figure I know the area...theres big bucks here and Katrina sells RE here the past 20+ years so its still a good home base till I feel comfortable with my assets which I'm not satisfied with yet. Unfortuntaly I've had to work from the ground up...Builds more than houses that way I spose...builds some character! http://WWW.CLIFFORDRENOVATIONS.COM
I don't know if all these deals are gone in your area or not...
but a guy i went to hs with & I use to hunt down older houses on double lots, do a little title work to make sure it was or had been 2 lots... he & I only did 2 of these but we built some pretty nice (for us) houses on the lot while he usually lived in the existing house... we were maybe 20 at the time... but it was fun and we learned alot... he kept doing it... still does he's king of find'n lots that most people just figured were peoples side yards... he's done well ... don't know if it's even an option in your area... and i don't know how the taxes work on those type deals... In many cases he buys the house & lot... cleans up the house some and tries to get all his money back on that sale... so that he owns the lot free & clear...
p
Unless the Dems in Congress change things, capital gains in the immediate future gets a bit more erratic. If you are in a low tax bracket, it looks like 2008 is the year to collect your capital gains:"The 2003 Tax Act’s provisions lowered the rates on long-term capital gains to 15% for taxpayers in the 25% bracket or higher and lowered the 10% rate to 5% for individuals in the 10% and 15% tax brackets, effective May 6, 2003, through December 31, 2008. This provision eliminated the five-year holding period rates of 18% and 8%. In 2008, the new 15% rate remains the same but the 5% rate drops to 0%. In 2009, the capital gain rates will return to the old 20% and 10% rates, and the five-year holding period rules and rates return. The act did not change the capital gain rates for collectibles (28%) and unrecaptured section 1250 gains (25%). The new capital gain tax rates apply to both the regular tax and the alternative minimum tax (AMT) calculations."from: http://www.nysscpa.org/cpajournal/2004/1004/essentials/p36.htm
OK, it looks like I missed an update on the situation. The following is from the Wikipedia
http://en.wikipedia.org/wiki/Capital_gains_tax:
(They also talk about homeowners exemption, but I figured this quote was long enough as is):"In the United States, individuals and corporations pay income tax on the net total of all their capital gains just as they do on other sorts of income, but the tax rate for individuals is lower on "long-term capital gains", which are gains on assets that had been held for over one year before being sold. The tax rate on long-term gains was reduced in 2003 to 15%, or to 5% for individuals in the lowest two income tax brackets. Short-term capital gains are taxed at a higher rate: the ordinary income tax rate. In 2011 these reduced tax rates will "sunset", or revert back to the rates in effect before 2003, which were generally 20%."The reduced 15% tax rate on eligible dividends and capital gains, previously scheduled to expire in 2008, has been extended through 2010 as a result of the Tax Reconciliation Act signed into law by President Bush on May 17, 2006. As a result:"In 2008, 2009, and 2010, the tax rate on eligible dividends and capital gains is 0% for those in the 10% and 15% income tax brackets."After 2010, dividends will be taxed at the taxpayer's ordinary income tax rate, regardless of his or her tax bracket."After 2010, the long-term capital gains tax rate will be 20% (10% for taxpayers in the 15% tax bracket)."After 2010, the qualified five-year 18% capital gains rate (8% for taxpayers in the 15% tax bracket) will be reinstated."Technically, a "cost basis" is used, rather than the simple purchase price, to determine the taxable amount of the gain. The cost basis is the original purchase price, adjusted for various things including additional improvements or investments, taxes paid on dividends, certain fees, and depreciation.
I don't know if all these deals are gone in your area or not...<<<I spose thats possible "anywhere" but where I am...you're lucky to afford one house. The cheapest hunk O junk (and I'm not exagerating) is over a million dollars! btw...I'm the poorest doode in the hood...lol
One or two more of these and I could move anywhere there's no ocean and feel like Donald Trump...lol. http://WWW.CLIFFORDRENOVATIONS.COM
If you want to minimize the tax that's probably the best way.
Take advantage of the two year exclusion.
"Being a cowboy aint all ridin and shootin" - Tim Mooney