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What months of the year do homes sell the quickest for Condo's and Single Family?

Since 2016 the months March through August appear to give sellers the most optimal time.  An absorption rate estimates the rate at which active listings are selling in a given market.  It is calculated by dividing the number of closed sales by the number of active listings. 

A low absorption rate means that homes are selling slowly (suggesting a buyers market) while a high absorption rate means homes are selling quickly (suggesting a sellers market). 

Now is a great time to list your home.  Clearwater Beach was just voted the #1 beach in the country.  Home values are at peak levels and if history repeats itself we are entering a sellers market.  

Call Tom or Kristin with the Coastal Properties and the Tom Smith Team to set up a listing appointment.

Kristin Vincelli 727-686-1596

Tom Smith 727-776-3375

Tom Smith Team over 40 years experience and over $100,000,000 sold!

Coastal Cleanup Event

by Tom Smith Team

Coastal Properties and the Tom Smith Team will be hosting our Coastal cleanup on Friday, February 22nd at 8:30 a.m. in Clearwater Beach and we would like to invite you.

Meet us at the FREE parking lot just south of the South Bay Condominiums on Sand Key

Feel free to reach out to me with any questions. Please RSVP if you would like to join us!

 

Kristin Vincelli

Tom Smith Team

727-686-1596

Over $100 Million Sold!

New 2018 Tax Law Impact on Real Estate Owners

by Tom Smith Team

Congress has approved sweeping tax cuts and tax reform that have not been tackled by the federal government in over 30 years (since the Tax Reform Act of 1986.). The new tax law, formally referred to as “The Tax Cuts and Jobs Act,” will go into effect on January 1, 2018.

Primary Residence Homeowners

As a result of doubling the standard deduction to $12,000 for single filers and $24,000 for married filing jointly, according to Moody’s Analytics, as many as 38 million Americans who would otherwise itemize may instead choose the higher standard deduction under the new tax plan.

Any home mortgage interest debt incurred before December 15, 2017, will continue to be eligible for the home mortgage interest deduction up to $1,000,000. Any home mortgage interest debt incurred after this date will be limited to no more than $750.000 qualifying for the home mortgage interest deduction. Beginning in 2018, the deduction for interest paid on a home equity line of credit (“HELOC”) will no longer be eligible for the home mortgage interest deduction. However, the new tax law preserves the deduction of mortgage debt using to acquire a second home.

State and local taxes (referred to collectively as “SALT”) can be deducted but will no longer be unlimited as under current tax law. The 2018 tax law will allow homeowners to deduct property taxes and either income or sales taxes with a combined limit on these deductions being limited to no more than $10,000.

Both the House and Senate tax bills had originally proposed increasing the length of time a homeowner would need to live in primary residence (from five out of eight years versus the current requirement to live in a primary residence two out of five years to qualify for the Section 121 tax exclusion.) This proposed change did not become a part of the 2018 tax law. Homeowners owners will continue to only need to live in their primary residence twenty-four (24) months in a sixty (60) month time period to be eligible for tax exclusion up to $250,000 if filing single and up to $500,000 if married filing jointly. Property owners will still have the ability to convert a residence into a rental property or convert a rental property into a residence and qualify for tax exclusion benefits under both the primary residence Section 121 rules and also potentially qualify for tax deferral on the rental property under Section 1031.

Investment Property Owners

Investment property owners will continue to be able to defer capital gain taxes using 1031 tax-deferred exchanges which have been in the tax code since 1921. No new restrictions on 1031 exchanges of real property were made in the new tax law. However, the new tax law repeals 1031 exchanges for all other types of property that are not real property. This means 1031 exchanges of personal property, collectibles, aircraft, franchise rights, rental cars, trucks, heavy equipment and machinery, etc. will no longer be permitted beginning in 2018.

Some investors and private equity firms will not have to reclassify “carried interest” compensation from the lower-taxed capital gains tax rate to the higher ordinary income tax rates. However, to qualify for the lower capital gain tax rate on “carried interest” investors will now have to hold these assets for three (3) years instead of the former one (1) year holding period.

Investment property owners can continue to deduct net interest expense but investment property owners must elect out of the new interest disallowance tax rules. The new interest limit is effective in 2018 and applies to existing debt. The interest limit, and the real estate election, applies at the entity level.

The new tax law continues the current depreciation rules for real estate. However, property owners opting to use the real estate exception to the interest limit must depreciate real property under slightly longer recovery periods of 40 years for a nonresidential property, 30 years for a residential rental property, and 20 years for qualified interior improvements.  Longer depreciation schedules can have a negative impact on the return on investment (“ROI”) and property owners will need to take into account these longer depreciation schedules if they elect to use the new real estate exception to the interest limit.

The tax law creates a new tax deduction of twenty (20) percent for pass-through businesses. For taxpayers with incomes above certain thresholds, the 20 percent deduction is limited to the greater of: 50% of the W-2 wages paid by the business or 25% of the W-2 wages paid by the business, plus 2.5% of the unadjusted basis, immediately after acquisition, of depreciable property (which includes structures, but not land). Estates and trusts are eligible for the pass-through benefit. The 20% pass-through deduction begins to phase-out beginning at $315,000 for married couples filing jointly.

The new tax law restricts taxpayers from deducting losses incurred in an active trade or business from wage income or portfolio income and this will apply to existing investment and becomes effective in 2018.

State and local taxes paid in respect to carrying on a trade or business, or in an activity related to the production of income, continue to remain deductible. Accordingly, a rental property owner can deduct property taxes associated with a business asset, such as any type of rental property.

The new tax law retains the 20% tax credit for the rehabilitation of historically certified structures, but taxpayers must claim the credit over a five (5) year time period.

This article is only intended to provide a brief overview of some of the tax law changes that will affect any taxpayer who owns real estate and is not intended to provide an in-depth overview of all the new tax law provisions. Every taxpayer should review their specific situation with their own tax advisor.

Calling All Dog Lovers!

by Tom Smith Team

Are you a dog lover?  We need your help!

On Saturday, February 23, 2019, Southeastern Guide Dogs will be hosting a huge festival and 3K Walk at Vinoy Park in St. Petersburg while attempting to break the world record for “the most number of dogs wearing bandanas at an event”.  The current record of 860 dogs is held by a group in Angus, Scotland.

Kristin Vincelli, along with her family and the Tom Smith Team Coastal Properties is participating in the 2019 Southeastern Guide Dogs walkathon. Southeastern Guide Dogs is attempting to break a Guinness Book of World Records next year and we could really use your help.

We have been asked to bring any friends/clients/family members to come along with the dog – the more the merrier. Make sure you let us know your coming so we can meet you there.  You can reach Stephen Vincelli at 727-430-1995 by phone or text.

To join us, please click here for the link to the Facebook event we’ve created: https://www.facebook.com/events/342651493156892/

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Contact Information

Photo of Tom Smith Team Real Estate
Tom Smith Team
Coastal Properties Group International
423 Mandalay Ave., #102
Clearwater Beach FL 33767
(727) 776-3375