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No one likes taxes, unless you are getting a tax return of course. Capital gains are a tax that you have to pay when you sell something for more than you paid for it. In this case we will use your South Nashua home as the example. Say you buy your South Nashua home for $250,000, and then you sell your South Nashua home for sale a year later for $275,000. That is considered a capital gain, and you have to include them when you file your taxes.
Here are a few simple ways to avoid capital gains!
Wait Before You Sell
If you want to purchase a South Nashua home for sale as a primary residence, and later you decide it isn’t the right fit for you and your family and you want to sell it, you should wait at least two years before you do so. As long as it has been your primary residence for two of the last five years, will remove any gain you may make under $250,000. For a married couple it is even more, up to $500,000 at $250,000 per person.
A one year wait will also mark the value of other sales as a long-term capital gain, and you may even save 10%-20% depending on your tax rate. However, we always suggest asking your accountant, it doesn’t hurt to check with your local CPA to make sure the rules have not changed and that you are still making a sound decision.
Sell When Your Income Is Low
Your income level will impact the amount of long-term capital gains tax you will pay. The lower your income percentage is, the less money you will pay when tax time rolls around. The higher your income tax bracket, or the more you make yearly, the more you will be required to pay come the end of the year. People in the 25-35% income bracket pay around 15% on capital gains, while taxpayers in the 39.6% bracket pay 20%, and in the 10%-15% bracket you may not be required to pay any long-term capital gains at all.
You are best off to sell your property when your household income is the lowest so you can avoid paying capital gains tax at all. However, that is not always possible so always discuss it further with your CPA to make sure you are selling at the right time.
Keep Your Home Improvement Receipts
Keep all your records! Make sure to keep receipts for any home improvements or additions you’ve made to your South Nashua home for sale over the years that you have lived there, or while you owned your South Nashua home. In addition to increasing your home’s value, any improvements that you make to your home increase your basis in the home and that will reduce your capital gains tax.
This tax-savings strategy can be particularly valuable! If you have a gain on your South Nashua home for sale and the house doesn’t qualify for the primary residence exclusion, or you’ve exceeded your exclusion amount it may come in handy.
An improvement is anything that betters your home. It could also restore your South Nashua home to a previous condition or adapt the condition it is in. Adding rooms, a deck, a pool, or even landscaping the property all count as improvements to your South Nashua home for sale. Upgrading windows and doors, plumbing, insulation, heating, cooling, wiring, irrigation or an indoor sprinkler system also qualify. Restoring damaged parts of your home, remodels including new kitchens, bathrooms, flooring, and built-in appliances are also improvements that are deductible. Retain copies of receipts and records and keep a log of all the purchases you’ve made.
Although this can be time consuming, selling your South Nashua home for sale will help you use the capital gain to its fullest potential. You need to have lived in your house for at least two years to claim the exclusion. The IRS will allow taxpayers to use the exclusion multiple times, but no more than once every two years. This means you could sell multiple homes at a large gain and never pay a dime in taxes!
The capital gain exclusion is large enough that many taxpayers will never have to pay taxes on the sale of their Sale Nashua homes or for that matter wherever you live. AS stated previously, a married couple can exclude up to $500,000 or $250,000 each. However, if you’ve held your property for a long time, bought in desirable area, or you are single then the exclusion may not completely cover your gains.
If you are looking for a South Nashua New Hampshire home for sale give Harmony Real Estate a call at (603) 883-8840. You can also visit our website at www.Harmony-RE.com for a list of South Nashua homes for sale. Our team is a family and we will make sure you find a home that best suits your needs! We look forward to hearing from you!
Closing Costs are fees that are associated with the purchase of your Southern NH home for sale that are paid at the closing of a real estate transaction. The closing is the time at which the title of your Southern NH home for sale is transferred from the seller to the buyer. The closing costs of the loan are incurred by the buyer. While the seller pays for commission, transfer of the deed and a few other miscellaneous state fees.
There are many different fees you can expect to encounter when you are closing on a new home in Southern New Hampshire. They vary widely depending on where you live, the type of home you purchase, and the type of loan that you choose to take out. These fees may include:
Home buyers will pay anywhere between about 2% to 5% of the purchase price of their home in closing fees but it typically ranges around 3.5%. Your lender will give you a loan estimate for your loan, which will include what the closing costs on your home will be. Many of the fees that make up closing costs may be negotiable. You can also look around for different lenders to see who may be willing to offer you a loan with the lowest closing costs and especially the lowest interest rate.
Whether you are moving across Nashua NH, or out of NH you want a stress free move. Making a list and having a plan ahead of time will really help and keep you more organized during your moving process.
Here are 10 tips for your move:
1. Throw away items that you don’t use anymore.
There is no need to bring useless items on your move to South Nashua NH. Either toss the items, give them away, sell the items, or donate the items to your local charity. You'll be helping fray costs for others or for yourself and in the long run it's not worth the extra hassle if you don't use the items anymore.
2. Decide if you are going to move alone, or if you will be hiring a mover.
If you choose to hire a mover be sure to interview a few different ones and find the best fit for you. Depending on the company, the movers and the cost will make a difference for you personally. Do they have a good reputation? Do they cost too much? Will they be on time? Check out their ratings and reviews online to know more about them. These are all questions you should be asking yourself.
3. If you plan to pack up your items on your own, start doing this ahead of time.
You don’t want to pack last minute and be in a time crunch that causes more stress. Ask for help from your family and friends if need be. If the movers have to pack for you there will be an additional cost added to your bill. Also make sure to label all your boxes so you are not searching endlessly for items that you might need after the move to your South Nashua home.
4. Begin using your food that’s been stored in your freezer or pantry.
The less you have to move with you to your new South Nashua home, the better. You can always buy more food after you’re settled in. If there is food you aren’t going to eat, or don't have time to make, donate it to your local food pantry or soup kitchen, it wont go unappreciated or wasted! It will save you time and potentially use items that may have gone unnoticed for a while.
5. Prepare to have your utilities shut off or transferred if they aren't a part of your monthly rent.
Call your utility companies and give them enough notice so they can get it taken care of before your move. Don’t forget that some companies may have a fee to turn off utilities and transfer them to a different location. Also, some utilities may take a few days to transfer so don't wait until the last second.
6. Start to notify all your credit card companies, schools, banks, doctors, insurance companies, etc.
They will need to know where you will be moving so they can change that information in their systems. Make sure to send a change of address to the local post office so your mail isn't sent to your previous address. If you have missing bills that could end up being a real problem.
7. Pack a box with necessities!
Items such as toilet paper, hand sanitizer, wipes, paper towels, cleaning products, a hammer and screwdriver, packing tape, a cell phone charger, ziplock bags, paper cups and plates, as well as plastic utensils, a pen and notepad, a first aid kit, snacks and plenty of water to keep hydrated while you are moving. Having a box of all the necessary items in a convenient place will make life so much easier during the first week when you may still be unpacking.
8. Have cash on hand.
You may need cash or a card on the ready to purchase unexpected items that may come up. You never know what is truly going to fit into your new place until you get there. Expect the unexpected! Sometimes your couches and furniture won't fit in the new place due to lack of space or different openings on doors that may be hard to get through.
9. Keep your important papers and documents with you.
You might need them when you are driving, especially if you are moving out of state. You don’t want anything important to be misplaced or packed away where you can’t get ahold of it. If you have valuable items like jewelry or hard to replace items like passports you will want to make sure you keep them handy so they don't disappear.
10. Always accept help from your family and friends.
Moving can be very stressful so if there is anything they are willing to help you with, let them help! A helping hand is always appreciated, just remember though that they may need you too so be ready to help them when they need it too.
If you are looking to make your special move to South Nashua give Harmony Real Estate a call at (603) 883-8840. We are here to help the most important person, you. The agents at our office would love to help you when buying or selling your home!