The days when you could convert your rental property or vacation home to a principal residence and then use the full $250,000/$500,000 home-sale exclusion to avoid taxes are gone. Here’s how the $250,000/$500,000 exclusion works today. You must divide your period of home ownership into two categories—qualified and nonqualified use: Qualified use means the time…
Real Estate
Cashing Out Real Estate Profits without Section 1031
Paying taxes on the sale of your real estate is voluntary. You do not need to volunteer. Whenever you can, avoid the outright taxable cash sale of investment property. To avoid taxes while you build your portfolio of real estate investments, use the Section 1031 exchange. This strategy allows you to acquire bigger and better…
Home Office with More Than One Business
The office-in-the-home deduction produces good-to-excellent tax savings by turning personal house expenses into business deductions. Additionally, it enables you to deduct big vehicle expenses by eliminating nondeductible commuting mileage. But to qualify for the home-office deduction, you must use the office exclusively for the business or businesses for which you are claiming the deduction.