Investment is one of the many reasons why most people are buying properties for sale in the market. However, the story of owning a house or a property does not end there; the truth is it only just began. Aside from paying your monthly mortgage you also have to bear in mind about your real estate tax, because no matter where you are and how much property you own you are likely to pay a real estate tax. You may not encounter any issues paying for it but knowing the tax laws could help you save some money.
According to IRS.gov, you can file an exclusion of income when you decide to sell your house or property as long as you meet the requirements for the ownership and use tests. To pass the ownership test, you have to own the home for a minimum of two years. For the use test, the owner should consider the place as the main home and should also live or stay for at least two years. This has to be done during the 5 year period ending on the date of the sale.
By doing so,you will be able to save up to $250,000. This is the amount that you can apply for exclusion from your income. There is no need to report the sale on your tax return if all your gains have been excluded. However, when the situation happens the other way around, it is taxable and should be reported on schedule D of Form 1040. Do take note that any loss from the sale of the main home is none deductible.
In case you have more than one real estate property and live in both of them, the home where you live in most of the time is your main home, and this is the only property where you can file for exclusion. There are times where rebates are also available; you just have to know the requisites.
When it comes to dealing with a real estate tax, the best thing to do is to get assistance from a property tax attorney. You can ask your real estate agent or broker like Manhattan Boutique Real Estate for referrals to save more time and money. You may like Manhattan Boutique Real Estate on Facebook, follow them on twitter or you may call 212-308-2482 for more helpful tips and other information you need.