Mark Hasha

California Prop 90 Update!
September 1, 2010 · Mark Hasha · Comment here

California’s Prop 90 allows a home owner in California to sell their home, buy a replacement property in a participating county, and move a lower prop 13 based tax value from their old home to the new county for the purpose of home tax assessment. It allows the adjusted base year value of the original (sold) property to be transferred to the newly purchased or constructed home if eligibility requirements are met.There are some restrictions like the claimant or claimant’s spouse must be at least 55 years of age. The replacement property must be your principal residence and must be eligible for the homeowners’ exemption.

 Participating counties are Alameda, Orange, San Mateo, Ventura, Los Angeles, San Diego, Santa Clara and now, El Dorado County.

 There are also purchase price restrictions on the new replacement property.     Read more

Ron Ricard - Investment Property Exchange Services, Inc

Converting your Primary Residence into Rental Property
September 2, 2009 · Ron Ricard - Investment Property Exchange Services, Inc · 5 Comments

The tax code allows you to keep some or all of the gain on the sale of a primary residence if you meet certain conditions.  IRC §121 permits the exclusion of realized capital gain of $250,000 for a single person and $500,000 for a married couple upon the sale of a home that was their primary residence for any two years during the five years preceding the sale.  If your gain is in excess of this exclusion, you may have to pay capital gain tax on the amount over the exemption.  This exemption cannot be used more than once every two years.

 Let’s assume you have lived in your home as a primary residence more than two years, but decide to move out and turn the property into rental housing.  If you sell the property less than three years after you move out, you still qualify for that primary residence exemption of $250,000 or $500,000.  So if your gain (profit) is less than those thresholds, you will have no tax to pay on your gain, though you will have to pay depreciation recapture tax on the amount that you depreciated the property while it was a rental.   Read more