How to Avoid Capital Gains
How to Avoid Capital Gains
by G Brian Davis
SparkRental.com
Bigger Pockets app
Real Estate
IN THIS ARTICLE
What is the capital gains tax on home sale?
Is my second home exempt from capital gains taxes?
1. Hold properties for at least a year
2. Move in for two years
3. Use a 1031 exchange
4. Invest through a self-directed IRA
5. Keep records on capital improvements
6. Sell assets when your income falls
7. Reduce your taxable income
8. Harvest losses
9. Gift properties to family members
10. Donate the property to charity
Related articles:
https://www.biggerpockets.com/blog/capital-gains-tax
https://finance.yahoo.com/news/avoid-capital-gains-tax-214204045.html
10 Reasons Why Generation Z Should Buy a Home
It’s about the people, not the property.
10 Reasons Why Generation Z Should Buy a Home
AKA:
10 Reasons Young People Should Buy a Home
Generation Z: Born 1996 and after
Generation Z is the first full digital generation.
Generation Z does a large amount of business online.
Generation Z are financially astute, mentally.
Generation Z are shrewd, savvy consumers.
10 Reasons Why Generation Z Should Buy a Home
1 There is a limited amount of land.
2 The home will be yours forever!
3 It’s one of the best investments you’ll ever make.
4 Your investment will appreciate.
5 Stability
6 The benefits of tax savings
7 Inflation protection
8 You can work from home
9 It’s capital gains
10 Wealth building
1 There is a limited amount of land.
No more land is being made. The United States is 3 million square miles. There are 330 million people here. That means, every person can get .01 square miles of land (in the simplest terms). Home ownership is a privilege, not a right. Take advantage of your opportunities. Buying a home automatically increases your wealth. Be part of the wealthy by investing in your home as an owner. Consider that a large majority of people do not own a home and stay in poverty or lower middle class.
2 The home will be yours forever!
You can decorate it anyway you want! You'll feel better about your own place if you own it rather than renting. The home and the land will be yours forever! You can live there, pay the rent, and watch the value grow. That does not benefit you when you rent. Buy a home and your net worth increases immediately.
3 It’s one of the best investments you’ll ever make.
Most of the things we purchase, depreciate (a car, clothes, shoes…). Most things we do, do not build wealth. Buying a home is a great investment! Once you purchase a home, you are now an investor. Stocks and bonds go up and down. Real estate, in the long run, appreciates (it goes up in value).
4 Your investment will appreciate.
A home appreciates in value. The younger you are when you buy a home, the longer you have to make money as a home owner. A home in 1940 could cost $2,000. That same home in 1980 could cost $40,000 or more. That’s a 2,000 percent increase! Housing costs generally rise faster than inflation. So buy your home early! Buying a home as a Generation Z’er is a wise investment, considering you need a place to live anyway!
5 Stability.
Owning a home creates financial stability and generational wealth. Your family will have security in a home (financially, physically, emotionally…). Your children can remain in the same school district. You can put in a jacuzzi. You can have a garden. There is no stability in renting! Your landlord can kick you out at any time for any reason. Owning a home gives you complete control of your living situation.
6 The benefits of tax savings.
We all want to save money in taxes. Some ways to save money in taxes is to own real estate. Some of the tax benefits to owning are deducting the mortgage interest on your taxes. You do not have to pay capital gains if you own your home for less than 2 years. This capital gains rule can be considered a tax gift from the government. Depreciation deductions from your home or investment property is a great way to save money. These ways of saving on your taxes are excellent incentives to buying real estate.
7 Inflation protection.
Your fixed mortgage will stay the same for 30 years (or the length of the term). Over the long term, owning a home has tended to beat rent inflation by a couple of percentage points a year. Those percentage points of savings increase with time. That's valuable inflation insurance, especially since stocks and bond yields have plummeted lately. Keep more money in your pocket. Invest in home ownership.
8 You can work from home.
If you’re a Generation Z person, CoVid has affected you differently than older generations. You might only know working from home or a hybrid work or school situation. When you buy a home, your home can be your office. This offers many incentives to save money (less travel, less car expenses (gas, upkeep), save on eating at restaurants…). Working from home (self employed, employee, blog, videos, percentage of home is work space (so tax deductible)…) is a great reason to buy real estate.
9 It’s Capital Gains.
It’s not the same as the stock market. The rules are different. The concepts are similar. Stocks can rise and fall. In general, real estate dividends can increase (or stay the same). Building equity is a great reason to buy a home. Your home becomes part of your portfolio in your wealth building strategy.
10 Wealth Building.
Building wealth comes in many forms. You can get lucky and hit the lottery, inherit real estate, or find and sell a rare painting you bought at a garage sale. More than likely, you’ll start with building credit, buying a home, and having a savings plan (401k, cryptocurrency investments, stocks, bonds…). Building wealth is not a get rich quick scheme. It takes time and planning. Generation Z, start now and you’ll get there!
These 10 reasons why Generation Z should buy a home should be helpful. We want to share ideas that have worked in the past, but be specific to your generation.
RICH (Real Estate Investment Corporation and Housing) can be found at <RichUsa.net>. Our email is RichRealEstate9@gmail.com. Our work number is 2018443155.