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(former)FormerSanDiegan
ParticipantHere is the article where I saw the quote:
Participant[quote=cashflow]Anyone have any articles or links to information on the changes that impact buyers of real estate in 2009 and forward? Someone on here had posted an article, which I am now unable to locate.
As I understood it, if you buy as of Jan. 1 ’09 you will be under the new tax law and will be taxed a percentage when selling the property (no longer tax free).
[/quote]
I think you are referring to the changes to the Section 121 exclusion …
Starting in Jan 2009, there is a change to taxes on the sale of a primary residence in cases where the property was not owner-occupied for some period of time.
The change results in taxes on the capital gains for the period for which the house was NOT owner-occupied. This only affects you if you want to convert a previous rental to owner occupied, live in it a few years then sell it. OR if you lived in it for a number of years and rent it out (but still meet the 2 out of 5 years owner occupancy rule) then sell it.Basically the amount of gain taxed is computed by determining the number of days after Jan 1, 2009 that the property was not “qualified use” (owner-occupied) and dividing this by the total number of days owned.
Here are a couple links :
Best explanation I’ve seen …
http://tinyurl.com/6red9oH&R Block
http://tinyurl.com/58727xAnother reference…
http://tinyurl.com/ReducedHomeSaleExclusionParticipant[quote=cashflow]Anyone have any articles or links to information on the changes that impact buyers of real estate in 2009 and forward? Someone on here had posted an article, which I am now unable to locate.
As I understood it, if you buy as of Jan. 1 ’09 you will be under the new tax law and will be taxed a percentage when selling the property (no longer tax free).
[/quote]
I think you are referring to the changes to the Section 121 exclusion …
Starting in Jan 2009, there is a change to taxes on the sale of a primary residence in cases where the property was not owner-occupied for some period of time.
The change results in taxes on the capital gains for the period for which the house was NOT owner-occupied. This only affects you if you want to convert a previous rental to owner occupied, live in it a few years then sell it. OR if you lived in it for a number of years and rent it out (but still meet the 2 out of 5 years owner occupancy rule) then sell it.Basically the amount of gain taxed is computed by determining the number of days after Jan 1, 2009 that the property was not “qualified use” (owner-occupied) and dividing this by the total number of days owned.
Here are a couple links :
Best explanation I’ve seen …
http://tinyurl.com/6red9oH&R Block
http://tinyurl.com/58727xAnother reference…
http://tinyurl.com/ReducedHomeSaleExclusionParticipant[quote=cashflow]Anyone have any articles or links to information on the changes that impact buyers of real estate in 2009 and forward? Someone on here had posted an article, which I am now unable to locate.
As I understood it, if you buy as of Jan. 1 ’09 you will be under the new tax law and will be taxed a percentage when selling the property (no longer tax free).
[/quote]
I think you are referring to the changes to the Section 121 exclusion …
Starting in Jan 2009, there is a change to taxes on the sale of a primary residence in cases where the property was not owner-occupied for some period of time.
The change results in taxes on the capital gains for the period for which the house was NOT owner-occupied. This only affects you if you want to convert a previous rental to owner occupied, live in it a few years then sell it. OR if you lived in it for a number of years and rent it out (but still meet the 2 out of 5 years owner occupancy rule) then sell it.Basically the amount of gain taxed is computed by determining the number of days after Jan 1, 2009 that the property was not “qualified use” (owner-occupied) and dividing this by the total number of days owned.
Here are a couple links :
Best explanation I’ve seen …
http://tinyurl.com/6red9oH&R Block
http://tinyurl.com/58727xAnother reference…
http://tinyurl.com/ReducedHomeSaleExclusionParticipant[quote=cashflow]Anyone have any articles or links to information on the changes that impact buyers of real estate in 2009 and forward? Someone on here had posted an article, which I am now unable to locate.
As I understood it, if you buy as of Jan. 1 ’09 you will be under the new tax law and will be taxed a percentage when selling the property (no longer tax free).
[/quote]
I think you are referring to the changes to the Section 121 exclusion …
Starting in Jan 2009, there is a change to taxes on the sale of a primary residence in cases where the property was not owner-occupied for some period of time.
The change results in taxes on the capital gains for the period for which the house was NOT owner-occupied. This only affects you if you want to convert a previous rental to owner occupied, live in it a few years then sell it. OR if you lived in it for a number of years and rent it out (but still meet the 2 out of 5 years owner occupancy rule) then sell it.Basically the amount of gain taxed is computed by determining the number of days after Jan 1, 2009 that the property was not “qualified use” (owner-occupied) and dividing this by the total number of days owned.
Here are a couple links :
Best explanation I’ve seen …
http://tinyurl.com/6red9oH&R Block
http://tinyurl.com/58727xAnother reference…
http://tinyurl.com/ReducedHomeSaleExclusionParticipant[quote=cashflow]Anyone have any articles or links to information on the changes that impact buyers of real estate in 2009 and forward? Someone on here had posted an article, which I am now unable to locate.
As I understood it, if you buy as of Jan. 1 ’09 you will be under the new tax law and will be taxed a percentage when selling the property (no longer tax free).
[/quote]
I think you are referring to the changes to the Section 121 exclusion …
Starting in Jan 2009, there is a change to taxes on the sale of a primary residence in cases where the property was not owner-occupied for some period of time.
The change results in taxes on the capital gains for the period for which the house was NOT owner-occupied. This only affects you if you want to convert a previous rental to owner occupied, live in it a few years then sell it. OR if you lived in it for a number of years and rent it out (but still meet the 2 out of 5 years owner occupancy rule) then sell it.Basically the amount of gain taxed is computed by determining the number of days after Jan 1, 2009 that the property was not “qualified use” (owner-occupied) and dividing this by the total number of days owned.
Here are a couple links :
Best explanation I’ve seen …
http://tinyurl.com/6red9oH&R Block
http://tinyurl.com/58727xAnother reference…
http://tinyurl.com/ReducedHomeSaleExclusionParticipantso prices haven’t droped that much in CV and some other upper middle class areas?(rich’s graphs say the same)
True they haven’t dropped as much, but they didn’t rise as much, either. If you look carefully at Rich’s charts (particularly the one copied below), you see that high-priced homes were not as overvalued during the bubble as the low-priced homes.
Therefore, by the time housing bottoms I don’t think you will see the same percentage decline in the high end as we will see on the low end, for the simple fact that the price distortion was not as great at the high end.[img_assist|nid=9439|title=Rich Toscano HPI data|desc=|link=node|align=left|width=376|height=299]
Participantso prices haven’t droped that much in CV and some other upper middle class areas?(rich’s graphs say the same)
True they haven’t dropped as much, but they didn’t rise as much, either. If you look carefully at Rich’s charts (particularly the one copied below), you see that high-priced homes were not as overvalued during the bubble as the low-priced homes.
Therefore, by the time housing bottoms I don’t think you will see the same percentage decline in the high end as we will see on the low end, for the simple fact that the price distortion was not as great at the high end.[img_assist|nid=9439|title=Rich Toscano HPI data|desc=|link=node|align=left|width=376|height=299]
Participantso prices haven’t droped that much in CV and some other upper middle class areas?(rich’s graphs say the same)
True they haven’t dropped as much, but they didn’t rise as much, either. If you look carefully at Rich’s charts (particularly the one copied below), you see that high-priced homes were not as overvalued during the bubble as the low-priced homes.
Therefore, by the time housing bottoms I don’t think you will see the same percentage decline in the high end as we will see on the low end, for the simple fact that the price distortion was not as great at the high end.[img_assist|nid=9439|title=Rich Toscano HPI data|desc=|link=node|align=left|width=376|height=299]
Participantso prices haven’t droped that much in CV and some other upper middle class areas?(rich’s graphs say the same)
True they haven’t dropped as much, but they didn’t rise as much, either. If you look carefully at Rich’s charts (particularly the one copied below), you see that high-priced homes were not as overvalued during the bubble as the low-priced homes.
Therefore, by the time housing bottoms I don’t think you will see the same percentage decline in the high end as we will see on the low end, for the simple fact that the price distortion was not as great at the high end.[img_assist|nid=9439|title=Rich Toscano HPI data|desc=|link=node|align=left|width=376|height=299]
Participantso prices haven’t droped that much in CV and some other upper middle class areas?(rich’s graphs say the same)
True they haven’t dropped as much, but they didn’t rise as much, either. If you look carefully at Rich’s charts (particularly the one copied below), you see that high-priced homes were not as overvalued during the bubble as the low-priced homes.
Therefore, by the time housing bottoms I don’t think you will see the same percentage decline in the high end as we will see on the low end, for the simple fact that the price distortion was not as great at the high end.[img_assist|nid=9439|title=Rich Toscano HPI data|desc=|link=node|align=left|width=376|height=299]
ParticipantI agree with sduuuude.
You should consider buying a personal residence that you will live in for a year or so, then rent it out and buy another personal residence.
As far as qualifying. In the old days (pre-2003) lenders typically required a lease agreement if you want to count the income from the rental property. They typically use 75% of the gross rent as income when computing your ratios.
The nice thing about this is that it forces you to be conservative when buying your next (personal residence) property.
To maximize profits you may have to be a renter for a few months between properties so that timing lease of the old property and buying a new one is not as important as getting the best deal.
ParticipantI agree with sduuuude.
You should consider buying a personal residence that you will live in for a year or so, then rent it out and buy another personal residence.
As far as qualifying. In the old days (pre-2003) lenders typically required a lease agreement if you want to count the income from the rental property. They typically use 75% of the gross rent as income when computing your ratios.
The nice thing about this is that it forces you to be conservative when buying your next (personal residence) property.
To maximize profits you may have to be a renter for a few months between properties so that timing lease of the old property and buying a new one is not as important as getting the best deal.
ParticipantI agree with sduuuude.
You should consider buying a personal residence that you will live in for a year or so, then rent it out and buy another personal residence.
As far as qualifying. In the old days (pre-2003) lenders typically required a lease agreement if you want to count the income from the rental property. They typically use 75% of the gross rent as income when computing your ratios.
The nice thing about this is that it forces you to be conservative when buying your next (personal residence) property.
To maximize profits you may have to be a renter for a few months between properties so that timing lease of the old property and buying a new one is not as important as getting the best deal.
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