{"id":3273,"date":"2024-02-27T08:47:51","date_gmt":"2024-02-27T13:47:51","guid":{"rendered":"https:\/\/moshepopack.com\/?p=3273"},"modified":"2024-02-27T08:51:41","modified_gmt":"2024-02-27T13:51:41","slug":"how-to-legally-sell-real-estate-without-paying-taxes","status":"publish","type":"post","link":"https:\/\/moshepopack.com\/2024\/02\/27\/how-to-legally-sell-real-estate-without-paying-taxes\/","title":{"rendered":"How To (Legally) Sell Real Estate Without Paying Taxes"},"content":{"rendered":"\n

If you read my blogs and watch, or listen to, my podcast, you probably know that I don\u2019t often sell real estate<\/a> \u2026 at least not for several years. While I typically hold real estate as a long-term investment there are times when I\u2019ve sold earlier than normal. In fact, I\u2019ve sold real estate in order to do something that\u2019s called a \u201c1031 Exchange.\u201d<\/p>\n\n\n\n

What that means is, usually when you sell a stock, or a bond, or an asset, you have to pay taxes. But, with the federal code called the \u201c1031 Exchange\u201d you\u2019re able to take that and buy like-kind exchange of other real estate. So, I would sell the property, not pay tax, and roll it into a new piece of real estate. This is something that I\u2019ve done a few times.<\/p>\n\n\n\n

In addition to the \u201c1031 Exchange\u201d below are some more ways that you can legally manage taxes in real estate transactions.<\/p>\n\n\n\n

First, you can see if you qualify for a capital gains exclusion for your primary residence. This is a tax benefit in the U.S. that allows homeowners to exclude a certain amount of capital gains from the sale of their primary residence from their taxable income. To qualify, you must have owned the property for at least two out of the five years before the sale. And, the property must have been used as your primary residence for at least two of the five years before the sale.<\/p>\n\n\n\n

For individuals, the maximum exclusion is $250,000. For married couples filing jointly, the maximum exclusion is $500,000. And, the exclusion can be claimed once every two years.<\/p>\n\n\n\n

It is important to point out that the exclusion applies to capital gains<\/a>, which are the profits from the sale of the home. It does not apply to other potential taxable items, such as depreciation recapture or gains on any portion of the property used for business purposes.<\/p>\n\n\n\n

Additionally, you can manage taxes by looking into any available tax credits or incentives for real estate transactions. Those could include energy efficiency credits or incentives for investing in low-income housing.<\/p>\n\n\n\n

As a real estate investor<\/a>, you might also be eligible for depreciation deductions. These deductions could allow you to deduct a portion of your property\u2019s cost over time, reducing taxable income.<\/p>\n\n\n\n

Another area to look into is tax-advantaged accounts. You could consider investing in real estate through tax-directed accounts. Those can include a self-directed IRA or a 401(k) if you\u2019re eligible.<\/p>\n\n\n\n

It’s critical to note that tax laws can be complex, so you should certainly seek professional advice to make sure that you are in full compliance. Engaging in illegal tax evasion schemes can lead to severe legal consequences and damage your financial standing.<\/p>\n\n\n\n

Maintaining ethical and legal practices is not only the right thing to do but also helps build a solid and reputable business in the long term. So, be bold, be confident, but be safe, and be smart!<\/p>\n","protected":false},"excerpt":{"rendered":"

If you read my blogs and watch, or listen to, my podcast, you probably know that I don\u2019t often sell real estate \u2026 at least not for several years. While I typically hold real estate as a long-term investment there are times when I\u2019ve sold earlier than normal. In fact, I\u2019ve sold real estate in … Continued<\/a><\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[14],"tags":[],"acf":[],"yoast_head":"\nHow To (Legally) Sell Real Estate Without Paying Taxes | Moshe Means Business Blog<\/title>\n<meta name=\"description\" content=\"Moshe Popack explains strategies for legally managing taxes in real estate transactions.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/moshepopack.com\/2024\/02\/27\/how-to-legally-sell-real-estate-without-paying-taxes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How To (Legally) Sell Real Estate Without 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