JJ Canull (AM Real Estate Resources)

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Rainmaker
6,161,137
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

If he is making a profit on an investment property, there could be tax consequences and that is all you need to say as you refer your client to his CPA for advice.

Jan 17, 2015 05:07 AM
Rainmaker
629,901
Ajay Pandya
e-Merge Real Estate - Columbus, OH
Realtor Ajay Pandya

Isn't it too early?

Jan 18, 2018 12:03 PM
Rainmaker
5,172,255
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

JJ,

I would tell him to speak to his tax advisor.  That protects you, as who knows how someone may interpret your "generic" answer.  We are not in the tax business arena.  A

Jan 17, 2015 03:02 AM
Rainer
279,648
Dipti Thakkar
LAER Realty Partners - Andover, MA
On a team with Praful Thakkar

A CPA or tax consultant is the best in this case.

May 28, 2018 10:42 PM
Ambassador
5,029,712
Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

The quick and best answer it to tell him to ask his accountant.

Oct 22, 2017 09:26 PM
Rainmaker
3,069,179
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Roy nailed this one!

May 13, 2017 04:31 AM
Rainmaker
793,147
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

You can look up the answers or call your own tax advisor, so you understand the issue, but never give a definitive answer without referring your client to a tax professional.

Jan 19, 2015 02:25 AM
Ambassador
2,216,158
Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

Have your buyer check with his attorney or tax professional. 

Jan 18, 2015 12:59 PM
Ambassador
3,722,026
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Actually, I never answer questions like this, because capital gains is so complex, espeially with investiment property.  I suggest they talk to an attorney who is a tax expert.  This stuff is way beyond my pay grade!

Jan 18, 2015 07:16 AM
Rainmaker
926,706
Ron Marshall
Marshall Enterprises - Saint Michael, MN
Birdhouse Builder Extraordinaire

Your best bet is to refer him to an accountant....unless that is your area of expertise.

Jan 18, 2015 02:25 AM
Rainer
80,093
RVA HomePRO Michael Hottman
RVA HomePRO Realtor with Keller Williams serving Hanover, Henrico, Chesterfiled and Richmond, Virginia - Glen Allen, VA
Helping you achieve goals in life & real estate

one more part the the potential tax relief is the property would have to be their primary residence for 2 out of the last 5 years. An accountant or tax attorney would be my suggestion for their individual situation, but also have them ask about a 1031 like kind property exchange. This is one way to deferr capital gains, but has lots of restrictions. 

There probably isn't a tax professional in our group but that should not preclude us from referring clients to the appropriate person and giving them the right questions to ask that other professional. Im would do the same thing for home inspections - encouraging other inspections if necessary or legal topics to ask an attorney about. We have to give our clients something to ask about when we referr them and not just say, I don't know, I can't give you that advice, good luck.

Jan 18, 2015 01:30 AM
Rainmaker
4,433,127
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I would not give anyone tax advice. Ask him to ask his accountant.

Jan 17, 2015 11:20 PM
Rainmaker
3,720,556
Nina Hollander
Coldwell Banker Realty - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Answering questions on taxes is outside my purview as a Realtor and I don't. Too much liability if you give the wrong answer and he listens to you. I suggest to people like that they consult with a tax person.

Jan 17, 2015 10:44 PM
Rainmaker
805,330
Pete Xavier
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide

Even if I where a CPA acting in the capacity of an agent I would have to defer that question over to a tax professional. So even if you knew the answer your professional liability insurance would not help if you happen to get in some sort of litigation by providing "non-professional" advice.

Jan 17, 2015 01:26 PM
Ambassador
3,986,094
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

You cannot possibly answer unless you are a CPA. Tax code changes every year so in my book I would say have the name of a tax consultant/CPA that you can defer his questions to.

Jan 17, 2015 12:52 PM
Ambassador
2,043,086
Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living

This is a question to ask an accountant.  As a REALTOR I cannot give advice in this area. 

Jan 17, 2015 10:48 AM
Rainmaker
407,561
Bill Dandridge
MKB, Realtors - Roanoke, VA
GREEN, ABR, GRI, EcoBroker

For an individual, the first $250,000 that you make on the sale of a property is not taxed. That is also a $250,000 appreciation, so if they bought it for $300,000 and sold it for $550,000, it should be without a tax penalty.

That is for a personal home, not an investment property.

Jan 17, 2015 09:56 AM
Rainmaker
332,139
Dave Hill PhD,ePro,SFR,CIAS,BPOR,CNE,CSC Chicago Area Real Estate Agent
Midwest Premier Realty, Gurnee IL 224-321-0699 - Gurnee, IL

The 'quick and general answer" is that (unless you are a CPA or tax advisor) you recognize that selling real estate may have tax consequences and that you recommend your client consult with their CPA or tax advisor.

Jan 17, 2015 08:24 AM
Ambassador
4,309,874
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Unless you are familiar with the details, refer them to the professionals JJ Canull .

Jan 17, 2015 08:10 AM
Rainmaker
758,053
Bob Force (REALTOR®)
Century 21 - Redwood Realty - Mount Airy, MD
The FORCE in Maryland Real Estate

JJ:

That is a question I wouid not answer, I am their Realtor not their CPA.

Jan 17, 2015 07:52 AM
Rainer
279,004
John Crosby
Real Property, Inc. - Marblehead, MA

JJ Unless you are a tax accountant, I would tell your client to contact their tax accountant.   

Jan 17, 2015 07:30 AM
Rainmaker
812,893
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

We can't provide tax or legal advice even if we know the answer.

Jan 17, 2015 07:01 AM
Ambassador
4,389,620
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Yep, the quick answer is that he needs to speak with a tax professional to determine what the tax consequences could be for his particular situation

Jan 17, 2015 06:38 AM
Rainmaker
4,799,006
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

If it's an investment property there are a lot of variables, so no quick answer, I'm afraid.  Probably best to send him to a tax adviser or a CPA.

Jan 17, 2015 05:56 AM
Rainmaker
6,161,137
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Bankrate advisory:

The capital gain rate is 20 percent, but to the extent you claimed depreciation on this rental property, some of your profits may be taxed at ordinary income tax rates.

Your gain is going to be the difference between your sales proceeds and your adjusted basis in the property. You will be able to deduct selling expenses, including commissions paid on the sale. Your adjusted basis is calculated from when you acquired the property, adding in any capital improvements and deducting the depreciation claimed on the property. The depreciation you have claimed over the past five years is subject to "recapture rules," which means you report some of the gain when you sell the property at ordinary income tax rates and some of the gain at capital gain tax rates.

Jan 17, 2015 05:09 AM
Rainmaker
1,072,104
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

Where the IRS is involved there's never a quick and simple answer. The process has nothing to do with sale price and everything to do with net gain. Single persons can avoid up to $250,000 of taxable liability while couples enjoy double that amount. It's time to bring in the financial adviser to sort out the best move.  

Jan 17, 2015 03:49 AM
Rainmaker
849,440
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

Of course make certain your commentary is coverd by sufficient discalimers.

Questions that need answer are:
Is this an investment property?
Are you a USA Citizen?

Not an investment and a USA citizen. It is highly likey and others have said, the owner is not subject to capital gains taxes from the sale of residental property up to a accumutated capital gains of  $250,000 for single and $500,000 for married. ADD more disclaimers here......

Follow that with, "Now, let's price this right and get it under contract before the end of the month. I've got a sign in the trunk. Let's get started."

Don't take my word for it, here is what bankrate says:

http://www.bankrate.com/finance/money-guides/home-sale-capital-gains-1.aspx

Jan 17, 2015 03:37 AM