Your Home Your Nest Egg
While you are paying your home mortgage every month you are building up equity that you can leverage in the future. As the biggest investment that many of us will ever make it behooves us to know the tax implications of its sale (currently the first $250,000 of profit is tax deductible for a single person and the first $500,000 for a married couple assuming that you have lived in the home two of the past five years). In addition to taking advantage of the tax code on the sale of their homes many investors leverage the equity in their homes to purchase rental properties or vacation homes.
1031 Exchanges
In many cases the tax code allows you to sell your income producing property purchase a like kind property and defer the payment of the tax that is normally due on the sale. There are detailed rules associated with there exchanges so “don’t try them at home” without a professional’s advice and expertise.
Self Directed IRAs
Funds from a self-directed IRA can be used to purchase real estate assets and as long as the profits from the sale of those assets are retained in the IRA the taxes are deferred.
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