“A man’s home is his castle” is a common saying that is even reflected in the Bill of Rights. Another common saying is that there are but two certainties in life – death and taxes. So what happens “tax-wise” when one decides to sell his castle? Although there are many different tax consequences when selling a home, here’s a brief and broad overview of the tax ramifications when you sell your home.
IS IT YOUR PRINCIPAL RESIDENCE?
Most real estate investors understand the importance of using a limited liability entity to buy and sell property and to hold property for rental income. Many of these investors form a separate Limited Liability Company (LLC) or entity for each property they purchase. Unfortunately, some investors inadvertently do not comply with the basic “corporate” formalities required by state law when it comes to investment properties. Being non-compliant with entity formation, registration or reporting required by state law can be costly to investors.
North Carolina Enacts New Boudoir Law (aka "Revenge Porn" Statute)
The season of giving and gifting is upon us once again. For those of you who are pondering whether you will get on the naughty list with your gift, you may want to think twice.
In 2012, I moved from the backwoods of Oregon to Fayetteville, North Carolina. Finally living in a city, I was so excited because I thought I would finally get my first trick-or-treaters! I purchased a plastic pumpkin candy bucket and two huge bags of candy from the local Food Lion, and when October 31st rolled around, I was ready. Sadly, I did not take into account that I lived at the end of a dark street, and unfortunately went another three years of eating all the candy by myself (or maybe not so unfortunate).
Thinking about buying a home? Have you completed all the necessary checks?
'Tis the season of ghostly and gory movies and TV shows. Whenever I see a movie or TV show depict hauntings or grisly murders in a house, I often wonder… “if I was buying that house, would the seller have to tell me about the lingering spirits? Could I be stuck with a real life Haunted House?”
At Hutchens Law Firm, we have quite a few real estate agents that represent foreign investors in the acquisition and sale of real property in North Carolina. What many agents and foreign clients do not realize is that there may be tax implications when the client goes to sell the property.
The Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) imposes an income tax on any foreign person selling real property in the United States.