Home Buying & Selling – Union, Morris, Essex & Somerset Counties of NJ

Owners of Real Estate investments who are considering selling, should be aware of a noteworthy tax incentive to sell their investment properties in 2010, rather than afterward.  The capital gains tax is expected to rise considerably in 2011.  A capital gain occurs when the amount realized on the sale of the asset is greater than the taxpayer’s basis, loosely the purchase price plus any monies invested in the asset, less any fees, taxes and depreciation deductions claimed.  Short-term capital gains are for investments held for a year or less before being sold, and incur a greater tax burden than Long-term capital gains, which are for investments held over a year.

American taxpayers have been on a ‘tax holiday’ since 2003, when legislation was passed which largely reduced capital gains taxes, but only through 2008.  On May 17, 2006, George W. Bush signed the Tax Reconciliation Act, which extended this tax reduction through 2010, and additionally eliminated all capital gains tax for those in the tax brackets of 10 or 15%. Starting in 2011, the current maximum 15% Long-term Capital Gains Tax is scheduled to revert to 20% for those in the 25-35% tax brackets, and back to 10% and 20% respectively for those in the 10 and 20% tax brackets.

For more information about capital gains, go to www.IRS.gov and refer to Publication 550, ‘Investment Income and Expenses’, or Publication 17, ‘Your Federal Income Tax’.  Please consult with your tax advisor on how the changing tax laws will affect you specifically.  If you are considering selling or purchasing any residential investment properties in Union, Morris, Essex or Somerset Counties of New Jersey, you can call Judi Paris for a free, no obligation consultation.

Judith “Judi” Paris, Broker/Sales Associate

Coldwell Banker Realtors- Summit, NJ

(O) 908-522-3631  (C) 973-902-HOME

Visit me at:     www.BestHomeResults.com

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