Florida Real Estate Blog

 So what happens if you took advantage of the last 3 years boom in Real Estate. Say you purchased a home in 2003 for $150k and sold it in June of 2007 for $350k. You have a great profit of $200k but don’t forget you have tax considerations coming January 1^st 2008. If you do not reinvest that in a primary residence you would owe Capital Gains Tax. That is 15% or $30,000 to the IRS. So if you are not reinvesting please set that aside. If you are contact us today so we can assure you find the home you want within the time frames the IRS requires you to purchase. We will also assure you have all the documents needed to file your 2007 Tax return and save that $30,000.

Some additional Tax thoughts from Web sites across the country.

The major advantage to owning real property comes from the availability to deduct the interest of a home mortgage and a home equity loan. In order to qualify for an income tax deduction for interest paid on a mortgage:

(1) "acquisition indebtedness" incurred in acquiring, constructing or substantially improving a qualified residence secured by the residence, is subject to a $1,100,000 aggregate loan amount limitation

(2) "home equity indebtedness" (other than "acquisition indebtedness") secured by a qualified residence to the extent that the amount of the loan does not exceed the fair market value of the qualified residence reduced by the amount of the acquisition debt, subject to a $100,000 aggregate loan amount limitation.

(3) "qualified residence" means your principal residence and one other residence (such as a vacation home) that is not rented to others.

The interest that you pay on a mortgage for your home, your vacation home, and for a home equity loan can be deducted from your income. In order to take the deduction, Schedule A (Itemized Deductions) must be completed and attached to your 1040 Federal Income Tax Return. Many states likewise enable you to take a deduction from your taxable income for interest paid on your home, qualified vacation home and qualified home equity loans.

Real estate taxes are also deductible on your federal return. Deductible real estate taxes are any state, local, or foreign taxes on real property levied for the general public welfare. The taxes must be based on the assessed value of the real property and must be charged uniformly against all property under the jurisdiction of the taxing authority. Deductible real estate taxes generally do not include taxes charged for local benefits, trash and garbage pickup fees, transfer taxes, homeowners’ association charges and rent increases to higher real estate taxes.

Taxpayers can exclude $250,000, or $500,000 for married taxpayers filing a joint return, as gain from the sale of a home. This exclusion can be used only once every two years. The principal residence must have been lived in as such for two of the five immediately preceding years. Gain in excess of the exclusion is taxable, sometimes at a rate as low as 15% (plus state income tax rate (none in Florida)), usually as long-term capital gain.

Deed, when can I expect it? The Deed to your property is one of the most important documents you have and yet so many of us have no idea where it is. The Deed and your Title Insurance are what protect your ownership of property. So when do you get them? At the time of closing you will get a copy of the Deed (not the real one, the real one will come 30 to 60 days later after it has been recorded in the county records)

At the closing you will also have a copy of your commitment to provide Title Insurance. Again it is not Title Insurance it is just a commitment to provide it. The actual policy should come once your deed is filed. If you do not have them you must locate them. I would suggest going back to the Title Company or Attorney that handled your closing. They should be able to assist you in this matter.

So what happens if my deed is not filed with the county? Well the previous owner can sell the property again as in the case of Rice v. Greene back in June 25, 2004. Buyer #1’s deed never was filed and the Seller sold the home again to Buyer #2. When Buyer #1 found out they sued and lost the case. Since Buyer #2 Deed was filed before Buyer #1.

Make sure you have your Title Insurance and Deed and your ownership will never be in jeopardy.

What do you do when the buyers disappear? That is what we are seeing today in the Open House Events. Little or no buyer activity, so how do we find them. Maggie and I have begun buying Buyer Leads from Search engines and Home & Land magazine. This provides us with individuals that are in the market and will be buying within the next year. We then match them up with the properties we have for sale and email them the

property details and photos. This allows our listings to be presented to buyers well before they receive their magazine. It also assures our Sellers that their home will be seen by Buyers looking in Central Florida for a home like theirs. Statistics say that 70% of those buyers will buy from the first Agent they contact with. That is another reason Maggie and I are Top in Sales and Listings in the Longwood area.