Avoid Getting Blindsided with Capital Gains when Selling a 2nd Home!

By
Real Estate Agent with Red Rock Real Estate (435) 632-9374 UT DRE# 6541633-SA00

Avoid Getting Blindsided with Capital Gains when Selling a 2nd Home!

 

When property owners are ready to put a property on the market, it's important for them to understand all tax consequences prior to selling. Meeting with a tax professional first, is highly recommended. How much a 2nd home seller will pay in capital gains, depends on multiple factors:

~ longevity of home ownership

~ how the property was used

~ total cost of home improvements

~ profit made from the sale of property

~ filing status and income

~ the applicable gains tax rate

 

Home improvements can be deducted that were made to the home from the adjusted base of the property. This can reduce the amount of the taxable gain. For example: Hiring a company to install a pergola, renovations or the addition of a pool, the cost becomes deductible.

 

While it is my job to help guide a home sale, tax advice is not in my realm of expertise. Again, consult with a tax professional when unsure about capital gains taxes. One who is experienced, reputable and can help determine eligibility for exclusions and calculate potential tax liability.

 

I'll second that!

Posted by

I, Wanda Kubat-Nerdin at Red Rock Real Estate Utah am responsible for my opinions expressed in this blog. Information herein is deemed to be reliable but not guaranteed and may change due to market conditions. Please do not take my pictures or artwork and use them as your own, they are my property and copyrighted.

Member of

Wanda Kubat-Nerdin is a southern Utah REALTOR® assisting buyers and sellers in in the St. George area, Dammeron Valley, Diamond Valley, Veyo, Central, Hurricane, Ivins, La Verkin, Leeds, Santa Clara, and Washington real estate markets.
See my full profile

Red Rock Real Estate
90 E 100 S, St. George, UT 84770

BuynSellUtah.com
Mobile: (435) 632-9374 call or text
Email Me

My Blog Posts

Comments (24)

Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Similar to getting bombarded with compacted snowballs in the head when the person throwing knows your attention is elsewhere, except much worse. Not exactly a preferred end result, George Souto!

Dec 01, 2023 12:55 PM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Trish Cole, being proactive in this respect can prevent so many unsavory experiences. There are consequences to being ignorant and the 'I didn't know' defense is unacceptable!

Dec 01, 2023 01:00 PM
Ed Silva, 203-206-0754
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

I recently had to lay this out for a client as he was selling a second home. I gave him some tips with a 1031 exchange which may happen with a vacation home in Florida.

Dec 01, 2023 01:46 PM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Better to be armed with the right information than to suffer through the unintended consequences, Ed (Edward) Silva, 203-206-0754. A vacation home in Florida sounds nice for many who are in colder temps!

Dec 01, 2023 03:59 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good advice Wanda. Always best to have the facts and go in with your eyes wide open!

Dec 01, 2023 05:06 PM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

The more information, the better, in most cases, Dorie Dillard Austin TX. That way, less stress, unexpected impediments or delays in the process!

Dec 01, 2023 05:46 PM
Charles Ross - eXp Realty LLC
eXp Realty LLC Salina Group - Salina, KS
Love To Help People

Great article, Wanda! Your focus on the complexities of capital gains tax in the context of selling a second home provides much-needed clarity. This is valuable advice for anyone in the real estate market. #CapitalGains #InformedRealEstate 📊🏖️

Dec 01, 2023 07:55 PM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Thank you Charles Ross - eXp Realty LLC. Best representation means encouraging clients to search out all options that benefit them best up front!

Dec 01, 2023 08:01 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Wanda Kubat-Nerdin - Wanda Can!  great post and my advice is always to talk with an accountant before you make a move and maybe a 1031 exchange might be an option.... end result is I might get the listing later, but at the same time I might get another sale from it because of the advice I gave, Endre

Dec 01, 2023 09:35 PM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

The best thing to do with capital gains of any kind is to invest them into an Opportunity Zone fund, especially if you can allow them to increase in value for another 10 years.  By doing so, you never have to pay taxes on those capital gains nor the future gains!

Dec 02, 2023 04:29 AM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

Great point! Sellers should always look at the tax ramifications of a sale - it wouldn't be good to be surprised in April.

Dec 02, 2023 05:01 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Good morning, Wanda... an excellent alert... I find that no matter how experienced a homeowner, many forget this particular issue of capital gains or know little about it.

Dec 02, 2023 06:33 AM
Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

It’s a great post. Thank you for sharing!

 

Have a super fantastic week!

Joe Jackson, Realtor-KWCP

Dec 04, 2023 10:54 AM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

I’ve been selling my Rental Properties and the Key Number is $250,000 ! That number and below is taxed at 15%. The dollars received above that are taxed at 23.8% .  Also if a couple are on Medicare , it will triple their monthly payments !

Dec 04, 2023 04:56 PM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Consulting with a trusted tax person is the first part of getting much needed information to move forward in listing a 2nd home, Endre Barath, Jr.!

Dec 04, 2023 06:24 PM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Interesting information, Brian England. Never heard of that!

Dec 04, 2023 06:24 PM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

No one likes those kind of surprises, Kat Palmiotti!

Dec 04, 2023 06:25 PM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Capital gains when selling is part of any 2nd home, investment property or vacational rental and the more home owners know, the better, Nina Hollander, Broker!

Dec 04, 2023 06:26 PM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

You're welcome, Joe Jackson, thanks for stopping by!

Dec 04, 2023 06:26 PM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

The is a huge difference in taxation, Michael J. Perry and advantageous to know when selling a property or properties, as in your case!

Dec 04, 2023 06:28 PM