Tax Savings - Sumitomo Real Estate NY - Sumitomo Real Estate Sales New York

BUYERS GUIDE

Tax Savings

For Owner

  • Loan interests and property tax are eligible for income tax deduction.
  • The Home Sale Tax Exemption individuals can exclude up to $250,000 of capital gains from taxation, while married couples can exclude up to $500,000.
    ※ To qualify for the home sale capital gains tax exemption, you must have owned and lived in the residence for a total of two out of the five years before the sale.

For Investor

  • The cost attributable to the building is depreciated over 27.5 years (residential) using the straight-line method for tax purposes. Land is non-depreciable therefore, no depreciation is permitted. In summary, the cost of the building is written off ratably over the life of the asset via annual depreciation deductions.
  • 1031Tax Exchange - 1031Tax Exchange is a transaction in which a taxpayer is allowed to exchange one investment property for another by deferring the tax consequence of a sale.