Posted on Sunday, November 26, 2017 5:50 PM
 Will you pay tax on the sale of your home? Likely not, unless you
have gains that are more than $250,000 or more than $500,000 for married
couples.
Old Rule: Until 1997, once you reached the age
of 55, you had the one-time option of excluding up to $125,000 of gain
on the sale of your home providing it was your primary residence.
New Rule: Now, anyone, regardless of age, can exclude up to $250,000 of gain or $500,000 for a married couple filing jointly on the sale of a home.
That means most people will pay no tax unless they have lived there for less than 2 out of the last 5 years Who Qualifies for Tax-free Gains When They Sell Their Home?
To qualify for the capital gain tax exclusion on your home sale, you must meet the following IRS requirements.
- Owned the home for at least 2 years. (the ownership test)
- Lived
in the home as your main home for at least 2 years. This is the use
test. If you plan on renting your home for part of the year, study this
use test carefully. The amount of gain you can exclude from taxes may be
proportional to how much you use it vs. rent it.
- During the 2-year period ending on the date of sale, you did not exclude gain from the sale of another home.
The Law Office of Jeanne M. Reardon
assists New York property owners with strategies to protect and pass on their
homes and real estate investments. To speak with an experienced New
York real estate attorney, call us at (516) 314-8433 or e-mail us. To learn more about our deed transfer services
visit us at: www.jreardonlaw.com
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Law Office of Jeanne M. Reardon: Posted on Sunday, November 26, 2017 5:04 PM
 There are many reasons you may want to add someone to the title of your
home. Maybe you just got married and would like your new spouse listed as part
owner of your home. Or you may want to add an adult child to your title
for estate planning purposes.
Whatever the reason, you will need to retain an attorney, experienced in
real estate, to draft a new deed conveying your home to yourself
and the person you wish to add to your title. In addition to the deed,
your attorney will also need to prepare transfer tax returns. While there is no
transfer tax due on conveyances which are considered gifts, (i.e. no money
given for the conveyance) the returns must still be prepared and filed with the
county clerk when the deed is recorded.
Review your mortgage documents or contact your lender before initiating the
process to change your deed. If you transfer your interest in the property, or
a share of it, to someone else without the lender's permission, it may exercise
the loan's due-on-sale clause. Even if the person you're adding doesn't give
you money for ownership in your property, the lender still may view the
transfer of ownership as a sale and can demand payment in full. Depending on
your financial situation, this issue may cause you to reconsider making the
addition. If your mortgage contains a due upon sale clause, talk to your lender
about adding someone to your deed. Some financial institutions give consent,
allowing you to add another person to your property deed without requiring you
pay off your loan.
How your new deed is drafted will determine your type of joint ownership. There
are three ways to take title to the deed in New York depending on the language
used in your deed, and they are as follows: (1) joint tenants with rights of
survivorship, (2) tenants in common, or (3) tenants by the entirety. Your
attorney can advise you as to which type of joint ownership is appropriate in
your case.
The Law Office of Jeanne M. Reardon
assists New York property owners with strategies to protect and pass on their
homes and real estate investments. To speak with an experienced New
York deed attorney, call us at (516) 314-8433 or e-mail us. To learn more about our deed transfer services
visit us at: www.jreardonlaw.com/Deed-Transfer.html
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