Vacation homes can be a source of great pleasure during their ownership; the reality of how they are treated for tax purposes happens once you decide to sell the property. You may have determined that the cottage at the beach or condo slope side at the mountain is your “investment” property, however, the truth is, […]
Archive | Second & Vacation Homes
“My accountant told me to just pay the tax…….”
We hear this troubling refrain too often. It seems that many accountants and attorneys will tell their clients that a Section 1031 exchange is cumbersome and just delaying the inevitable. Some advise that the tax rates today are the cheapest you will ever see, “It’s easier to just pay the tax” they say. In far too […]
Thinking About Selling Your Vacation Home? The Time To Start Planning is NOW!
There are two types of real estate that can be sold with advantageous tax treatment, your primary residence and your business/investment property. Favorable treatment exists for the sale of a personal residence if the property has been the primary residence of the taxpayer for two of the preceding five years. Section 121 of the Internal […]
Changes to Section 121 for Exchangors
Taxpayers who own a second home and want to defer the capital gain on sale have used one of two strategies to achieve tax relief. The property can be converted to rental property for a minimum of two years prior to sale and structured as a Section 1031 Exchange using a Qualified Intermediary with the […]