Will you have to pay capital gains when selling?

BY PHILIP A. RAICES

In the last few weeks I have had several inquiries concerning capital gains on the sale of one’s primary residence. There are a multitude of variables that come into play. It would be smart to strategize and determine in advance of selling if there will be any capital gains to be paid. The first step is to check out those homes that have sold recently (in the last 3 months) in your area that are similar to yours e.g. bedrooms, baths, EIK, interior square footage, lot size and condition, etc. Then take that price and do a hypothetical calculation. You can use the following as an example:

∙Comparable sale: $975,000

∙Your original purchase price: -$

∙All capital improvements: -$

∙Married: -$500,000

∙Or single: -$250,000

∙Closing Costs: Lawyer -$

∙Adjustments for oil/gas: -$

∙Adjustments for R. E. taxes: -$

∙Nassau: Transfer tax: $4 per $1000 of sale price

∙Queens: “City tax 1% of sale price

<$500,000

1.425% above $500,000

•Remaining mortgage: -$

•Real Estate Taxes paid -$

•Mortgage Title: (if paying off)

-$250.00

• Real Estate Commissions: -$

• Any advertising costs: (FSBO) as the most recent ones. They will be crucial in the event of an audit by the IRS. Keeping organized and accurate records will save you quite a lot of money, especially if you are a new homeowner; as they will greatly benefit you as allowable deductions when you are ready to sell. tions and exemptions, but consult your CPA and/or financial planner for greater insight into your specific allowable expenses.

Mortgage interest on mortgage debt (up to $750,000); unless your mortgage was on or before Dec, 15, 2017 then the interest on up to a $1,000,000 mortgage can be taken. Also, your local real estate and state tax (S.A.L.T.) up to a maximum $10,000 can also be deducted.

-$

• Staging fees: -$

• Escrow Fees: (if any) -$

When you subtract all your deductions you may or may not be required to pay any capital gains tax. Another item that will come into play and will be an important factor in calculating your capital gains tax is your marginal tax bracket at the time of your sale. The lower your tax bracket the less you will have to pay in capital gains. The tax can be 0-20%. Keep in mind this must have been your primary res idence for the last 2 out of 5 years and not an investment property. You can also deduct and repairs and upgrades that you have performed to make your home more saleable, as long as they were done within 90 days of the closing. Make sure you keep all your receipts from any capital improvements that you have made over the years as well

However, if itemizing you will need to compare it with the standard deduction(which has doubled in recent years to $25,900) to determine which method will provide a greater benefit. If you paid any points to get your original or refinanced mortgage, these are also allowable deductions. If you had put down less than 20% for your purchase price and paid points to receive private mortgage insurance, they would also be deductible from your sale price; but there are limitations, so discuss with your CPA. Also, any points on your mortgage to reduce the actual cost, or interest rate, would also qualify as a deduction too. Home equity interest is an allowed deduction only if used for home improvements. However, your primary and home equity loans combined cannot exceed $750,000 for interest to be deductible.

Any green improvements, solar panels, heaters, and heat pumps have an

There are also ways to defer capital gains by not selling your home, but by renting it out for at least 2 years and then it becomes an investment property. It is critical to keep records of the rent that you collect to prove it was rented in the event of an audit. You can then decide to sell it using an allowable IRS 1031 deferred Tax Exchange process. Once selling the property after 2 years and 1 day, the money received is held by your attorney or 3rd party Exchange. You will have 45 days after the closing to locate a replacement investment property and total of 6 months to finalize the transaction by IRS rules and regulations. You can perform a 1031 Deferred Tax Exchange as many times as you want.

However, there is a holding period of at least 1 year on the property.

Also, if you have more than one investment property (always put each one in an LLC for minimizing your liability), you might also seek advice from your CPA and/or financial planner to create a trust. This will further, decrease your heir’s tax exposure when the day comes and you pass away.

One last item is that only $10,000 of local real estate and state and sales taxes that can be deducted yearly from your tax return. However, setting up a trust will allow greater deductions on real estate taxes that people and families wouldn’t normally be able to donation=form1&cid=Paid_ Search%3ABing_Paid%3AEmer_ Turkey%3ANonbrand%3A020623&s_ kwcid=AL%219048%213%21%21p%21% 21s%21%21donate+turkey&msclkid=5 bae766871a71211d4f9159a3d3eb9fc&gclsrc=ds

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Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 40 years experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S.) and in 2022 has earned his National Association of Realtors “Green Industry designation for eco-friendly construction. He will provide you with “free” regular updates of sold and new homes in your town via the Multiple Listing Service of Long Island (MLSLI) or go to https://WWW. Li-RealEstate.Com and you can “do it yourself (DYI) and search on your own. For a “FREE” `15 minute consultation, as well as well as a “FREE printout or digital value analysis of what your home might sell for in today’s market without any obligation or “strings” attached. He can also provide a copy of “Unlocking the Secrets of Real Estate’s New Market Reality, and our Seller’s and Buyer’s Guides for “Things to Consider when Selling, investing or Purchasing your Home.

You can email or snail mail (regular mail) him with your request or ideas, suggestions or interview you for a specific topic and a Q & A for a future

BY DENNIS MAMMANA

Week of February 26 -- March 4, 2023

Believe it or not, there remain quite a few people who still think we live on a flat Earth. How they’ve managed to escape exposure to scientific advances of the past two millennia I’ll never know. Perhaps they think that these are all hoaxes perpetuated by “the guvment.” I wish I had an answer.

In any case, the idea of a spherical Earth is not at all new. The concept goes back to the sixth century B.C., when the Greeks began discussing the topic; and then, around 330 B.C., the wise philosopher Aristotle offered some observational evidence to support this round Earth idea.

The matter was essentially resolved about a century later when the mathematician Eratosthenes noticed that, on the summer solstice, shadow lengths were different in Alexandria and Syene in Egypt. From the length of these shadows he used geometry to show not only that the Earth was spherical but calculated its circumference to within only a few percent of what we know today -- quite a remarkable achievement for the time!

We modern stargazers can use Aristotle’s technique to demonstrate easily the Earth’s curvature by simply looking skyward while traveling to different latitudes. In fact, a perfect group of stars to help us stands upright in the southern sky around 9 p.m. local time