THE LONG AND SHORT OF INVESTMENT PROPERTY in BERKELEY HEIGHTS

If your purchase a piece of investment property(non owner-occupied) with the intention of selling it for profit, watch your timing. If you hold the property and sell it in less than a year, you must treat it as a short-term capital gain.  This means you pay tax on any profit at ordinary income-tax rates that can range as high a 36% depending on your tax bracket. On the other hand, if you were to keep the investment property for more than one year, you are taxed at 15% rate.  That is a dig difference. One way to avoid higher tax on property held less than one year is to invest the proceeds in a property of equivalent value.  If you are considering purchasing an investment property, make sure that you have a strategic plan for your investment before you buy.