4 Feb
2016

Capital Gains Taxes And Property Purchases

Property-tax-cutsPresident Obama extended Bush’s tax cuts in December of 2010, suggesting that dividend taxation rates and the capital gains taxation level would stay at 15% through the end of 2012. Barring another extension of Bush’s cuts, those taxes increased in 2013 and later in 2014/15.

When you do a correct 1031 exchange, you may qualify for nil capital gains taxes. But new speculators should be aware of all the deadlines and limits imposed on 1031 exchanges to do them correctly. Missing one of the 2 required deadlines, choosing replacement property poorly or making other mistakes that can jeopardize the 1031 exchange, could result in the need to pay capital gains tax on property sales.

1031 Investments and Capital Gains

In a tax change that may affect those purchasing and selling assets and property that amount to at least $500,000 or more, with some people taking part in 1031 exchanges that could be affected, the amount of assets that could be written off dropped  greatly in 2012, and plunged later in 2013.

The write-off rules that allow up to $500,000 were extended last year until the end of 2015, but the maximum amount of assets’ costs that you will be able to deduct off in 2016 will be $125,000. In 2015, the maximum that could be written off could just be $25,000. This made a startling change in many people’s tax bills.

PropertyTax

Depreciation Deductions

Obama’s extension also continued the bonus depreciation of assets thru the end of 2015. If that isn’t extended, then the amount of the asset that could be written off under this bonus would possibly cut in half in 2016.

As of this writing, property that was purchased after Sep 8, 2015, and purchased before the end of 2015, qualified for this bonus depreciation extension. The write-off could be 100% of the asset, provided it was purchased in this window. If you missed these dates, depreciation write-offs offered only 50%.

It is advantageous to be aware of tax laws and impending changes so that you can make smart investment decisions. Connecticut Tax Lawyer also can help you being updated with the latest news regarding taxation.

Find Us

Address
123 Main Street
New York, NY 10001

Hours
Monday—Friday: 9:00AM–5:00PM
Saturday & Sunday: 11:00AM–3:00PM

About This Site

This may be a good place to introduce yourself and your site or include some credits.

Harvard

Our Location

Click to open a larger map