When you sell a piece of property, you may have to pay taxes on the profits made from the sale. This is called capital gains on real estate. This tax rate depends on how long you have owned the property.
If you’ve owned it for less than a year, you will likely pay ordinary income tax rates on your profits. You will likely pay long-term capital gains tax rates if you’ve owned it for more than a year.
How Does Capital Gains Apply to Real Estate in Florida?
In Florida, some special rules apply to real estate. First of all, there is no state income tax. This means that you will not have to pay any capital gains taxes on profits from a property sale in Florida. However, you will have to pay federal capital gains taxes.
In addition, different rules apply to a property sold within a certain time frame after it was purchased. If you sell the property within six months of buying it, you will have to pay ordinary income tax rates on your profits. If you sell the property more than six months after buying it, you will pay capital gains tax rates.
Factors Affecting Capital Gains on Florida Real Estate
A few factors will affect the amount of capital gains tax you have to pay on real estate in Florida. The first is the basis of the property. This is the amount you paid for it plus any costs associated with buying or selling it. If you sell the property for more than this amount, you will have to pay capital gains tax on the profits.
Another factor that will affect your tax bill is the depreciation of the property. You can take this deduction for any wear and tear on the property. If you sell the property for more than it was worth when you bought it, you may have to pay capital gains tax on the difference.
What Can Florida Realtors Do to Help?
If you are selling a piece of property in Florida, your real estate agent can help you understand how the capital gains rules apply to your situation. They can also help you file the appropriate paperwork with the IRS. In addition, they can help you find the best way to sell your property to minimize your taxes.
If you are buying a property in Florida, your real estate agent can help you understand how the capital gains rules will apply to the purchase. They can also help you find a property that will be as tax-friendly as possible.
If you have any questions about capital gains, please contact your local real estate agent. They will be able to help you understand the rules and make sure that you pay the least amount of taxes possible.
Contact JC Realty Group for Saving Capital Gains on Real Estate in Florida
As a full-service real estate firm, JC Realty Group is here to help you with all of your needs when it comes to capital gains on Florida real estate. We can help you understand the rules and make sure that you pay the least amount of taxes possible. If you have any questions, contact JC Realty Group at 877-531-1555