Here’s how you can make the most of the huge appreciation we’ve seen.
Lately, I’ve been getting a lot of phone calls regarding the appreciation that my clients have been seeing in their investments. They want to know what they can do to reinvest their money and promote the overall success of their investments. Here are three things to remember when it comes to your investments:
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Section 121 guidelines. If you have lived in your house for at least two out of the last five years, then you fall under Section 121 guidelines. That means if you’re married, you can get up to a $500,000 exemption on capital gains taxes. If you’re single, you can get up to a $250,000 exemption.
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1031 exchange. If you have an investment property, you can do a 1031 exchange, which allows you to move all the funds from the sale of your property to another investment and defers all taxes on that transaction.
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IRS revenue code 2005-14. If you’ve lived in the house for at least two of the last five years and you’ve rented it out, and your capital gains are over $500,000, you fall under the IRS guidelines revenue code 2005-14. That allows you to roll the amount over the Section 121 cap into a 1031 exchange.
I can put you in touch with my 1031 exchange expert to give you more information and guidance on the process. I also recommend that you speak with your tax consultant or accountant to gain a clear picture of your current financial situation before or after paying your taxes.
Don’t hesitate to reach out to me with any questions you have. I would love to guide you and help your investments become even more successful.
