Market Update (from my car)

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What You Need To Know About The 3.8% Tax!

Most importantly- Don’t freak out! It’s probably not going to affect you (or the sale of your home). Okay, now that we’ve gotten that out of the way you can check out the short video below and the National Association of Realtors’ “Top 10 Things You Need to Know About the 3.8% Tax” for more specific details.

 

 

See original article here

Learn the most important takeaways for REALTORS® when it comes to the 3.8% tax that’s part of health care reform:

  1. When you add up all of your income from every possible source, and that total is less than $200,000 ($250,000 on a joint tax return), you will not be subject to this tax.
  2. The 3.8% tax will never be collected as a transfer tax on real estate of any type, so you’ll never pay this tax at the time that you purchase a home or other investment property.
  3. You’ll never pay this tax at settlement when you sell your home or investment property. Any capital gain you realize at settlement is just one component of that year’s gross income.
  4. If you sell your principal residence, you will still receive the full benefit of the $250,000 (single tax return)/$500,000 (married filing joint tax return) exclusion on the sale of that home. If your capital gain is greater than these amounts, then you will include any gain above these amounts as income on your Form 1040 tax return. Even then, if your total income (including this taxable portion of gain on your residence) is less than the $200,000/$250,000 amounts, you will not pay this tax. If your total income is more than these amounts, a formula will protect some portion of your investment.
  5. The tax applies to other types of investment income, not just real estate. If your income is more than the $200,000/$250,000 amount, then the tax formula will be applied to capital gains, interest income, dividend income and net rents (i.e., rents after expenses).
  6. The tax goes into effect in 2013. If you have investment income in 2013, you won’t pay the 3.8% tax until you file your 2013 Form 1040 tax return in 2014. The 3.8% tax for any later year will be paid in the following calendar year when the tax returns are filed.
  7. In any particular year, if you have no income from capital gains, rents, interest or dividends, you’ll never pay this tax, even if you have millions of dollars of other types of income.
  8. The formula that determines the amount of 3.8% tax due will always protect $200,000 ($250,000 on a joint return) of your income from any burden of the 3.8% tax. For example, if you are single and have a total of $201,000 income, the 3.8% tax would never be imposed on more than $1,000.
  9. It’s true that investment income from rents on an investment property could be subject to the 3.8% tax. But: The only rental income that would be included in your gross income and therefore possibly subject to the tax is net rental income: gross rents minus expenses like depreciation, interest, property tax, maintenance and utilities.
  10. The tax was enacted along with the health care legislation in 2010. It was added to the package just hours before the final vote and without review. NAR strongly opposed the tax at the time, and remains hopeful that it will not go into effect. The tax will no doubt be debated during the upcoming tax reform debates in 2013.

Rand on Real Estate: Why Now Has Never Been a Better Time to become a Landlord

RISMEDIA, Tuesday, June 21, 2011— Greg Rand, CEO of OwnAmerica.com hosts “Rand on Real Estate” on 77WABC Radio in New York, where this week’s discussion comes from a caller from Orange County who does not believe that this is a time to buy real estate. Rand addresses a question about the effects of shadow inventory on the market and gives his recommendation to buy now, noting it has never been a better time to become a landlord. Rand also tackles the issue of high taxes making it difficult to turn profits from investments from a caller in New Jersey.

To see more clips on Rand on Real Estate, click here.

Greg Rand is the CEO of OwnAmerica, a company dedicated to teaching real estate professionals and consumers how to build wealth in American housing. “Rand on Real Estate” is a weekly video series where Rand offers his expert insights into how to grow wealth in the current real estate market. OwnAmerica also offers a web-based certification course for real estate agents who want to capture the residential investor market. Learn more about the course, “OwnAmerica Real Estate Investment Certification Program,” (OICP) by visiting OwnAmerica.com for details.
RISMedia welcomes your questions and comments. Send your e-mail to:realestatemagazinefeedback@rismedia.com.

*Credit RISMedia

From the first time home buyer to the savvy investor – from the seller with equity to the seller underwater and needing options – I am here for you.

 

Did you know…?

As of July 1st 2011 all homes in the state of California are required to have carbon monoxide detectors in them!  I highly doubt that the government will be sending any inspectors to your homes to confirm that you’ve complied.  I mean, how often to you hear about men in black suits knocking on random doors to verify a property has smoke detectors or that their water heater is properly braced to the wall? BUT, if you are selling your home and you will record after July 1st, you will need make sure that you have these detectors before you record to ensure that your property is up to code.  If you’re not selling your home any time in the near future, you may want to consider picking up a few of these detectors anyways… You never can be too safe, right?  As always, From the first time home buyer to the savvy investor – from the seller with equity to the seller underwater and needing options – I am here for you.

  

Tips for First Time Homebuyers

Buying your first home may seem daunting, but it doesn’t have to be. With a few helpful tips, you’ll be on your way to purchasing a home in no time!

From the first time home buyer to the savvy investor – from the seller with equity to the seller underwater and needing options – I am here for you.

Prepared Home Buyer 101

In today’s market, potential home buyers need to be prepared for the stringent guidelines enforced by mortgage companies.  If you have any concerns about your ability to qualify for financing contact Monica Jones today at MortgagesByMonica.com or call her at 925-339-1764.  She is always my first go-to person in the lending arena, and she will happily guide you through the process of credit repair.

From the first time home buyer to the savvy investor – from the seller with equity to the seller underwater and needing options – I am here for you.

The Power of Color

Color is the easiest, most cost-effective, and most dramatic way to instantly change the look of your home.  I can’t tell you how many times I’ve taken a buyer to see a home with the perfect floor plan, the best upgrades, location, and price BUT they just couldn’t get over the orange paint!

  • As sellers it’s important to remember that color has a huge impact on buyers, and not every buyer is going to share your unique taste.  Try to look at your home with a fresh pair of eyes, and decide for yourself if it might be time to refresh the paint.
  • As buyers it’s important to remember that a can of paint and an afternoon is all that stands between you and that orange wall!  Many times a home will stay on the market because other, less imaginative buyers passed on it based on the power of color.  This may mean that the perfect home might come with the perfect price tag.
  • And as homeowners it’s important to remember that our house is our home!  If there’s something not right about how you feel when relaxing in your living room, do something about it!  As is the case with the buyers, you need to remember that a can of paint and some elbow grease is a great combination to completely change the tone of your space.  Don’t worry about appealing to the masses.  When it’s time to sell your home, it’s easy enough to tone it down to a more neutral color scheme if needed.

 

From the first time home buyer to the savvy investor – from the seller with equity to the seller underwater and needing options – I am here for you.