Tax credit for foreclosure
Q: i was wondering about the $7500 tax credit you get for a foreclosure and if you have to pay it back?
A: The tax credit is for more than foreclosures. Yes - you have to pay it back. There are many factors that go along with this newest Government idea (suprise?). Rather than going into all the details, go to the IRS website - www.IRS.gov
How can I avoid taxes after selling my home
Q: How soon can I sell a home in Missouri after purchase without getting tagged with a whole lot of fees with taxes?
A: If it is your primary residence, you should stay there for at least 2 of the past 5 years to avoid capital gains (with some exceptions). If it is an investment property, you will have some taxes due. There are also some tax shelter / relief methods you could look into. Consult with a tax attorney or your CPA
Money rollover after a sale
Q : What is the law regarding rolling money over from a real estate sale ; ie-investment property - $220,000 ; net sale = $120,000 capital gain. If we roll over the monies in to another piece of real estate of higher value - how long of a time period do we have to reinvest, and what legal work is involved?
A : You should be able to take advantage of a 1031 exchange (like kind exchange). You cannot receive any proceeds personally. Usually the title companies can take care of this. A lot of banks do to. You will need to discuss this with the title company before they attempt to do it. There are special rules to qualify.
Debt Forgiveness Act
Q: I bought a house with friend as tenants in common 3 years ago. We both lived in the house for 1 year, then I tranferred (military) while he continued to live in the home for another year. After 1 year he stated he was filing for bankruptcy. I had him quitclaim the property to me, then tried to re-finance but was denied. My house is currently going through a short sale. Question: Do I qualify for the new Debt forgiveness act that passed? Technically, we (the owners) lived in the property for 2 years before I took him off title. He is still on the loan.
A: You might qualify for some of the new Debt forgiveness act. The fact that you lived in the house for 2 years applies to a capital gain exemption that is seperate from the Debt forgiveness act & has no bearing with your liability for funds not collected from an approved short sale.Since you were1 of 2 owners for most of the time you had title to the property & both obligated on the mortgage, the liability could be split, how that pertains to you & your taxes specifically might be a matter of interpretation. Since your friend / co-owner have different tax circumstances (he is filing for bankruptcy & you are not) , I suggest you consult a qualified tax advisor.
Tax lien
Q: I made an offer on a house and the seller accepted our offer. It is supposed to close in 2 days. We just found out there is a tax lien on the house. Our realtor said we can move in the house and wait for the tax lien to be taken off the title but it could take a month. Is this legal? Should we have not been notified about this long ago. We are suppose to move into this house in 5 days.
A: It is legal to move into a property prior to closing, usually on a short term rental agreement. Although this practice is usually discouraged, it is done in situations such as yours. The tax lien is something a Title company can make sure is satisfied (paid off, etc) & will not be your liability or responsibility once you take title. The only way to find this out (liens on a property) is to do a search, either through a Title company or a tax database examining procedure. I will assume you found out through the Title company. The downside to moving in prior, although it may be convenient, would be the possibility that the tax lien could not be removed on a timely basis (or at all). Find out by asking your Realtor or the Title company themselves. If you are still not sure, you might want to consult a Real Estate Attorney.
1031 Tax Exchange
Q: In the past 8 years we owned our vacation home outright, property values have increased significantly in that area. Do you think if we sell our vacation home and buy another more expensive vacation home, can we transfer any profit to the purchase of the new vacation home without income tax consequences?
A: You should be able to take advantage of a 1031 exchange (like kind exchange). You cannot receive any proceeds personally. Usually the title companies can take care of this. A lot of banks do to. You will need to discuss this with the title company before they attempt to do it. There are special rules to qualify.
