6 Tax Facts Costa Mesa Sellers Should Know

 

I was asked the other day by a seller if they sold their Costa Mesa real estate home would they be able to carry their gain forward and apply the gain from the sale towards their new purchase? While the simple answer to that question is, of course, you can! It made me realize not everyone is in touch with our current tax laws when it comes to selling Costa Mesa real estate.

 

Before I get going on this, I will warn you that I am pretty darn good with QuickBooks, but I am not an accountant :). But when it comes to selling a principle residence in Costa Mesa, the tax laws are pretty straightforward.

 

I put this handy infographic in this post for Costa Mesa sellers – these are the most common situations that pop up when it comes to selling Costa Mesa real estate.

 

By far the best tax exclusion going for all of the US tax code is the fact that you can exclude any gain ($250,000 single/$500,000 joint return) on a principle residence so long as you have lived there at least 2 of the last five years. That’s huge. Especially if you bought a Costa Mesa real estate home 3 years ago or so when the market was way down. You could make a bundle right now, and even move into a larger home to take advantage of today’s super low interest rates.

 

On the flip side, you can’t deduct a loss on the sale of a Costa Mesa house if it is your principal residence.

 

While there are some other good notes in our most common six tax questions in the image here, let’s go back to the original question at the top of this post. Can you exclude the gain on a principal residence and move it forward? The answer is yes, but let’s look at what else you can do.

 

You don’t have to move all that money forward to the purchase of the next Costa Mesa home. Cool. So let’s say you find a home in the perfect location, everything is perfect with the house, but it desperately needs a kitchen makeover. You take as much of the gain you would like to use from the sale of your previous home, exclude say $30,000 (Could you do it for less?) to do the kitchen, and ooh la! You have the perfect Costa Mesa real estate move, tax free no less! Or you could even pocket that money, and use it for other expenses you might have. Thank you, Uncle Sam!

 

For other questions about Costa Mesa real estate, feel free to contact Colin Delaney at (714) 743-9882 or E-mail me for help.