How to LEGALLY Pay 0% Capital Gains Tax on Real Estate
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- Опубліковано 30 тра 2024
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Is it legally possible to pay 0% capital gains tax on real estate? In this video, I'll show you how to legally pay 0% capital gains tax on real estate purchases.
"You can have income but still be at zero." 6:52
This video is for people buying or selling a property who want to avoid paying capital gains. I'll explain everything you need to know about capital gains tax and how to avoid paying it legally. I'll also give you some tips on how to make the most of your real estate transactions!
You're in luck if you want to avoid paying capital gains tax on your real estate investments! You'll be able to avoid paying thousands of dollars in taxes on your real estate investments by following the rules provided here.
To do this, you must understand the definition of capital gains and how it applies to your transactions.
Capital gains are the difference between the cost basis of a property and its sale price. Capital gains tax is based on this difference, and it can be significant if you neglect to take the proper steps.
Not only will this save you money on your taxes, but it will also save you time and hassle!
If you have any questions regarding capital gains tax or other investment strategies, then be sure to comment below.
Show Notes:
0:00 Intro
0:45 Depreciation
2:36 121 Exclusion
4:34 Tax Bracket
7:23 1031 Exchange
10:18 Outro
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ABOUT TOBY MATHIS
Toby Mathis, Esq. is the best-selling author of Infinity Investing: How the Rich Get Richer And How You Can Do The Same. Toby is a tax attorney and founded Anderson Business Advisors, one of the most successful law, tax, and estate planning companies in the United States. Learn more at aba.link/tobyaba
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The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice.
#capitalgains #taxes
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If I had 4.5 mil in IRA/401k/Brokerage savings how would you invest a sale of land of 9.3 mil with a basis of 500k? If you were also thinking of retiring next 1-2 yrs.
Thanks
Jlee
There's a 4th way, a superior way. If you have a Non Grantor, Irrevocable, Complex, Discretionary Trust with a Spendthrift Provision and sell your assets into it, all expenses of said assets are covered by the trust and all capital gains are non taxable events per IRC 643(b). This also applies to all passive income like stock sales, crypto gains,, not just real estate (applies to primary, secondary, rentals, etc) and you don't have to worry about recaptures, 1031 exchanges, etc. Not legal advice, do your own due diligence. Worth looking into. Be advised, this is a copyrighted trust, so make sure whoever creates it is authorized to sell it to you.
Well, now those are really good to know and to consider. Thank you once again.
Love these videos!
More to come so be sure to subscribe to the channel! 👍
Thanks for sharing your knowledge Toby. I really enjoy watching your videos . Addy
Glad you like them! Thank you for watching my channel 👍
Thank you
Great info. again. First video I ever watched, I shared.
Toby is THE best in this field .. tax deduction on real estate , capital gain , trusts , etc
Wealth of knowledge
@@vaskenderboghossian8061 He definitely is a wealth of knowledge!
Awesome, thank you for watching and sharing!
Thank you for the videos! I am leaning and is beneficial for me. How do I get myself down to zero percent tax bracket for my 2023 income tax? I have capital gains of $92,000 for an investment house I already sold. Thank you!
The best explanation. Thank you
I'm glad you found the explanation helpful! Thank you for watching!
Hi Toby, great stuff, thank you. When you talk about household income and tax brackets for retirees in example 2, how does VA disability play into that amount? VA disability is not subject to state and federal taxes, but does the income amount count against you in this scenario? Thank you.
I really like you. Trustworthy lawyer accountant.
Thank you 😄
Good to know, thanks!
Happy to help! Subscribe to the channel for more great free resources. 👍
If my income is $0, then is there a limit to how much investment income (capital gain) is really 0%?
Eric Bronnenkant, CPA - Betterment:
"Even if taxpayers have no taxable income, the 0% rate on LTCG only works up to the income-level threshold."@@TobyMathis
Every time I watch a UA-cam video of yours, this Mexican learns something 😂😂. Thank you Toby
When you sell your primary home for a profit doesn’t the gain get added to your adjusted gross Income which would push you into another tax bracket?
On the 121 Exclusion can I wait until 3-years after I begin renting my personal residence and sell it to my LLC with a note so that I can capture an even larger capital gain?
Thank u
Thank you for watching!
How does capital gains tax work if I have an investment property that’s been depreciated and I move into it as a primary residence I live in it for two years and then sell it. One do I have to recapture the depreciation and two is capital gains tax on the difference in value over recapture the depreciation?
i have a house no mortage it has been rented , i now want to sale it how do i avoid paying the I RS my taxe advisor said move there and live two years, but i love the house i live in now
Thanks!
Thank you for the super thanks!
250,000 ain't shit 40 years in my house 600,000 gain for me , can't afford to sell and buy a bigger house or downsize greedy government and they can't balance there budget
If you are married have 500k excluded. Over the 40 years how much did you spend on improvements, that also adds to your cost basis. Worst case you may have to pay tax on 100k
Not married
Great Video!! As always!! I followed your great advice and set up a Wyoming LLC. How can I use that to keep a sale of rental properties on the down low of IRS (or maybe a land trust). IS this doable?
Thank you so much for your question! We highly recommend you join us at our next Free Tax & Asset Protection Workshop Livestream. Our attorneys and specialists will answer all your questions at no additional cost. Save Your Seat: aba.link/taptoby
(NYC) Sounds great but my wife and I bought our house for 210,000 and it’s worth between 1.6m - 1.8m (28 yrs later) all paid off , never rented always my family use. Never took any deductions except mortgage interest. I know about the 121 but still have about 700,000Gain. Can I sell or gift a portion of the property to my 3 adult children. I make 125,000 a yr and I would like to sell but not lose a ton in capital gains. How would you structure a sale that benefits my family. Thank you. Eric
In terms of improvements, what if you did not maintain accurate records of substantial upgrades done over 14 years?
To get the best answer tailored to your specific circumstances, I recommend scheduling a free consultation with my team. Visit: aba.link/271618
Can you cover avoiding prop tax reassessment in CA when gifting rentals to kids IF they were not originally purchased in an LLC
California Prop 19 eliminated the parent to child exclusion on inherited property unless they plan to live in the property.
How do you not pay taxes on a partnership level ?
Do I need to start a retirement ROTH before investing and i have no credit cards but i have collections from the past do i need to pay this off as debt before increasing as well? Thanks TM love your videos!
I recommend signing up for a free membership with Infinity Investing, that way you can attend the various free events offered and learn how to utilize retirement accounts. infinityinvesting.com/pricing/
how about inheritance tax on property after the previous owner dies and i inherit the property?
Can the value of the house be adjusted for inflation? It doesn't seem fair to have to pay capital gains when the value of the money I get for my house is so much less than the value when it was purchased 20 years ago.
Hi, that's a great question. Have you ever signed up for a free consultation? I recommend signing up for a deeper dive for the best answer. aba.link/271618
Is this applicable in Canada?
Hey there, I am wondering about selling property in the US and using your suggested property gains tax ideas. Can I reinvest that into property in another country and avoid capital gains that way as well?
Great question, in order to assist you further, I highly recommend you request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. aba.link/tobyss
Question! How do you avoid paying taxes on the sale of raw land? I've only owned the land for two years and never receive any income on the property. As the was land was never leased. I was looking to built a home however things have changed.
Great question, in order to assist you further, I highly recommend you attend our Free Tax & Asset Protection Workshop where our attorneys and specialists will answer all your questions live at the virtual event. aba.link/taptoby
I am in the same situation have been researching but seems like you must pay the gains tax somehow
Coach please I want to know how to not paying capital gain on securities.
Thank you so much for your question! We highly recommend you join us at our next Free Tax & Asset Protection Workshop Livestream. Our attorneys and specialists will answer all your questions at no additional cost. Save Your Seat: aba.link/taptoby
What if you sell a vacation home at age 68, with a $12000 a year income, what percentage income tax do you pay on the gains?
Question: if you 1031 an investment prop into another investment prop that is in a no cap gains state can you sell that prop and pay no cap gains?
There are two levels of cap gains: federal and state. A no state tax state does not mean it is exempt from federal tax. So if you 1031 from a property in a state with a state cap gain into a property in a state with no state cap gain, you have only deferred both the state and federal taxes on the gain and recapture. Once you sell without a 1031, you will owe federal tax on the gain as well as the deferred state tax on the sale of the property in the state with a state tax on gains.
On a 1031 exchange does the gain follow the n w purchase or is it reset at the time of the exchange?
Generally, in a 1031, the gain is rolled into the replacement property, not reset. So, if you 1031 continually and then sell down the road, the capital gains tax could be rather large. However, if you 1031 until you die, then pass the property to your heirs, they will receive a step-up in basis, which will reset it (wiping out any taxable gains).
Hi, as a U.S. citizen, if I bought a new construction condo in 2019 in Ukraine, and builder/project went BK, and recently, the city of Kyiv repossesed the land they were building on, claiming it was gotten fraudently in 2006 involving a bribe. Dead project
Not sure how to write off this loss. Can't find any info. Do you know, or if not, where I can find such info? Thanks
For the 121 exclusion if you brought the house via the LLC name (holding company or operating company for example) and you sell it do you get the 250 or 500k exclusion?
Yes - see 26 CFR § 1.121-1 (the LLC must be disregarded for tax purposes).
Thank you for sharing. People should know that these opportunities exist.
Does the $90K cap for a 0% long term capital gains rate include earned income or just realized capital gains?
Capital gains only.
Thanks Toby for the video, both my wife and I have W2 jobs. We also have 2 rental that provides us a gain of about $18K a year. I was recently was let go from my job and wanted some help running the numbers to see if it makes sense for me to manage the rentals myself to take the tax deductions from her W2. Could you provide me some recommendations on what numbers I need to look mybe a spreadsheet or someone that could help? Thank you and keep up the great work.
Glad you enjoyed the video! Have you set up a consultation with my team before? If not, I would recommend scheduling one for an in-depth answer. aba.link/271618
My question is about the new IRS rule to probate a trust with the estate after March 2023 creation. How can we now protect our heirs from inheritance taxes?
Great question, we highly recommend requesting a free 45-minute consultation to discuss inheritance taxes and how they apply to your unique situation. aba.link/tobyss
Any way to prevent capital gains when selling vacant land that has appreciated over the years??
Great question! I recommend you join our upcoming free Tax and Asset Protection Workshop where we'll delve into strategies tailored to your specific situation. My team will answer your question live during the stream. Save Your Seat: aba.link/746a84
Howdy got a ?, i lived in my dads rental property for 15 years, we i just remodeled the whole thing, where going to sell it and use the money to put into a home we inherited when my grandmother died. Does that count as reinvesting money into a new property. Or will he have to pay capitiol gains on the rental house. Thanks. We also own a construction buisness we remodel homes, where not flippers tho.
Great question, in order to assist you further, I highly recommend you request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. aba.link/tobyss
My question is what if you have a single family rental and you take it out of a llc and make it your primary residence for 2 years then sell it do have to pay capital gains
Good question! What's the answer?
@@kevinford1543if it becomes your primary home and it's sold at a profit, You may exclude from capital gains $250K for filing single or $500k if you file jointly anything over that will be capital gains. I know the first 90k of Capital gains is taxed at 0. I'm still learning this.🥴
So it seems to work like this? The qualifying income level doesn't include the capital gain for that year, (ie, if you earn $50000, but sell a house for a gain of $70000, your qualifying income is still $50000 for a zero percent taxable gain? Is this correct? I was using turbo tax to experiment with a sale and it came up with an awful lot of tax due when I thought it would be a 0 taxable gain (although there was recapture of depreciation, but still seemed like a lot). I'm going to have to retry it again and look close to see where that tax is coming from.
Correct - gotta have earned income to contribute.
Quick question: Can I sell my property to my LLC for just enough where I show a $250K cap gain and then do it again in about 2 years until I bring my tax basis up to FMV?
To address your question thoroughly and ensure it aligns with your overall financial strategy, I recommend scheduling a free strategy session. Visit: aba.link/271618
Hey Toby, I lived in my primary for 15 years then retired and rented it for 5 years to go travel. It's appreciated nearly 3x and I'm 63, how long do I need to live in it again in order to take a $250,000 capital gains exemption ?
Great question, in order to assist you further, I highly recommend you request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. aba.link/271618
Hi Mr Mathis, I enjoy watching your videos.
I have a question. I sold a rental property in 2022 and paid large capital gains for it. I profited over $220k before taxes. I am retired since 2019 and I collect income from my rentals. In 2022, my taxable income was $44,587. In your video, option 2 I could avoid paying capital gains if I had 0 to low income bracket? Do I qualify ? If so should I amend my 2022 taxes.
Thanks for your time Mr Mathis.
I appreciate your support and glad you enjoy watching my videos! To get the best answer tailored to your specific circumstances, I recommend scheduling a free consultation with my team. Visit: aba.link/271618
Thank you for the information but I am still confused.
Assume 0$ tax bracket retiree with 25k annual income. Sells vacant land at 600k profit. Is the capital gain tax 0 or is it something else?
Great question, in order to assist you further, I highly recommend you request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. aba.link/tobyss
the gain in my house is 450k how do i avoid capital gain tax on the above 250k which is like 200k
Thank you for educations about capital gain. I owned small mountain land since 1955. I bought for build get away house with my dogs but couldn't build a home financially and got old. So I sold last year 11/2023 $25,500 purchased $13,000 After cost made $11,000.
Do I have to pay capital gain ? My adjustable income is after deduction over $7,000 much lower than $40,000
I am 78 years old. Please advice for me. Thank you
Inae Marshall
Thank you for sharing your situation, Inae. It's great that you're seeking advice on capital gains. I would recommend setting up a free consultation with my team to learn more. Visit: aba.link/271618
Coach!!!
What about installment sales of real estate? An installment sale reduces capital gain tax.
Thanks for bringing up the topic of installment sales! I recommend setting up a free consultation to discus strategies and how they apply to your unique situation. Visit: aba.link/271618
Can u pls Do video on capital gains of primary residence upon death of all-owners. Thank you.
I will take your suggestion into consideration. 👍
I own a house with my daughter that we are going to sell. Does the 121 exclusion apply to co-owners as well as married couples?
This exclusion is most often described or used by either single owners or married couples, but you don't have to be married, or a couple, to qualify for it. Unmarried co-owners can also use the exclusion.
@@TobyMathis Thanks!!
It seems to me that passing away so your heirs can avoid tax on inherited property is a rather extreme way of avoiding taxes.
I'm a real investor. I've been buying properties under my name and transfer them under my LLC later on. Can you show us how to get a mortgage loan under an LLC without using my personal income / W2?
Great question, in order to assist you further, I highly recommend you attend our Free Tax & Asset Protection Workshop where our attorneys and specialists will answer all your questions live at the virtual event. Visit: aba.link/746a84
Er...Move to Hong Kong?
Can I 1031 exchange a investment property and move in to it in a year and turn my primary residence into an investment property.
Hi, I recommend watching this video for a full breakdown of using a 1031 exchange that is related to your question. ua-cam.com/video/m7a8LWoS3Ks/v-deo.html
How do I pay no tax on property transfer to my trust? Do my beneficiaries pay taxes when I die ?
For personalized advice tailored to your unique situation, I recommend scheduling a free strategy session with my team to provide guidance on minimizing taxes when transferring property to your trust. Visit: aba.link/271618
Learn how to use the IRS tax code to your advantage and keep more of what you earn during this free webinar. aba.link/tqf
Hi Toby, thanks for info...will the "1031 Exchange" option work in Georgia? just to clarify...this is a good option if we "Did not" live in the house for 2 out of 5 years (home was owned for 7yrs)...is this correct? Thanks
Thank you for reaching out and seeking clarification on the "1031 Exchange" option in Georgia. To provide you with a comprehensive answer tailored to your specific situation, I'd recommend a detailed discussion in a strategy session. Sign up here: aba.link/271618
Sold property with capital gain. Can I pay off mortgage on my current home to offset the capital gain?
LOL, ummmm....no.
Hi Toby My wife and three siblings split the money from the sale of their deceased parents house. What are the implications when tax time comes?
Each of you will have to split the house market value in three. That will be your basis. In other words, it is really probable you will not have to pay taxes since you will sell it at market value.
I would confer with an experienced tax professional.
The only unfortunate part of your third way to avoid tax is that I'll be dead (so I guess it really doesn't help me). LOL
I guess there is the part about not paying tax every time you dispose of a property and pay no tax during your lifetime
Still helps, since now you essentially have 20% more money to put towards a more valuable property. No reason to ever sell, build your nest egg and then take a cash out refinance to live on since the property can cover the interest rate and interest on debt is lower than your tax rate would be.
Friends: Why'd y'all move back into that ol place for 2 of the remaining 5 years preceding the sale?
Us: Needed that $500,000 exemption and rented out our much larger and nicer place - thankfully we last claimed the exemption over 2 years ago.
Friends: Well done, ideal situation.
What if I bought my house 20 yrs ago in CA for 1.4 million and it’s is now worth 4.4 million and I sell it. Is there anything I can do about capital gains. I don’t want to buy another house. I wanted to put it in a Roth IRA for each of my children.
Great question, in order to assist you further, I highly recommend you request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. aba.link/271618
I believe the tax is deferred, so one day somebody has to pay.
👍😎👍
Flip mobile homes, made a fortune
2 min : 04 seconds. Listen again
Yeah sell below costs. No caputal gains to pay
$250,000 is nothing that helps
#4: be poor.
In Canada or US?