Archive for the ‘Tax Issues’ Category

Events: The Montgomery County Alabama Delinquent Tax Sale, June 6 – 7, 2012

Tuesday, May 29th, 2012

Events:  The Montgomery County Alabama Delinquent Tax Sale, June 6 – 7, 2012

The Montgomery County Alabama delinquent tax sale is the biggest county tax sale here in the River Region every year, and this year the delinquent tax sale will be June 6th – 7th.  I was talking to one of my clients who read my previous post about the two Alabama delinquent tax sale classes we’re holding this Saturday, June 2, and she asked me, “Can you REALLY buy houses at the delinquent tax sale?”

My answer to her was, of course, yes you can.

When I first met this client, she told me that, once she bought her house and settled in, she wanted to sit down with me and talk about buying investment property.  She wasn’t in a hurry, and she didn’t have a lot of money, but investing in real estate is something she had wanted to do for a long time.  She had heard about buying delinquent tax sale properties, and she told me that she is now interested in learning more about them.

She knew that delinquent tax sale properties were an investment, but she didn’t understand how the process worked, how much the delinquent tax sale properties cost, what you get at an Alabama delinquent tax sale, and how much money she could make from these delinquent tax sale properties.

That’s when I told her that you can often times buy these Alabama delinquent tax sale properties for just the amount of taxes due, and that, in Alabama, the law gives tax sale investors a 12% annual interest return on the price they paid, on up to 15% of the property’s tax appraised value during the redemption period.  Twelve percent annual interest return.  Annually.  For every year during the redemption period.  That’s more than the stock market, more certainly than a savings account, more than the rate that property values are rising in the area, and more than just about any other investment plan or program out there.

Twelve percent annual interest return!  Guaranteed by law!

That got her attention, and it should have.

Alabama delinquent tax sale properties can be a very important part of your real estate investment portfolio.  But you can’t just go into the delinquent tax sale and start bidding without being prepared.  If you don’t know what you’re doing, you can lose your investment or even be sued!  It’s important for you to learn what you need to know BEFORE buying properties at the Montgomery County Alabama delinquent tax sale!

The Montgomery County Alabama delinquent tax sale is June 6th – 7th.  We’re giving two classes on June 2, just a few days before the sale, so that what you learn will still be fresh.  These classes will teach you how the process works, what you get at the delinquent tax sale, what you can and cannot do with Alabama delinquent tax sale properties, how mobile homes are different, all about redemption rights, things that can get you in trouble, and much more!  You NEED to know this information before you attend the Montgomery County Alabama delinquent tax sale on June 6th – 7th!  Don’t miss out and potentially make a very expensive mistake!

 

 

Events:  The Montgomery County Alabama Delinquent Tax Sale, June 6 – 7, 2012

Learn to Buy Tax Sale Properties in Alabama! Classes on June 2, 2012

Friday, May 25th, 2012

Learn to Buy Tax Sale Properties in Alabama! Classes on June 2, 2012


Have you wanted to start investing in Alabama real estate but didn’t know where to start?  Have you heard about buying tax sale properties in Alabama, but didn’t know what they were or how to get started?

It’s important for you to know what you’re doing before you begin investing in real estate in Alabama, especially investing in tax sale properties in Alabama. In this case, what you don’t know CAN hurt you.

So on June 2, 2012, we’ll be holding two classes to teach you what tax sale properties are, how to make the numbers work for you, and problems and pitfalls to avoid to keep you out of trouble.

 Tax Sales: The Basics Class

The first class, Tax Sales: The Basics, will teach you about buying tax sale properties in Alabama, how the process works, how to quickly and easily target the best properties for you, how to determine what type of tax sale properties investor you want to be, what you actually get at the tax sale, and how to make the numbers work for you so that you can be successful.

 Tax Sales: Problems and Pitfalls

The second class, Tax Sales: Problems and Pitfalls, will teach you about common problems and pitfalls that can occur with tax sale properties in Alabama, steps that you can take to protect your investment, some things you can and can’t do with tax sale properties in Alabama, and things that can get you sued.

Both classes are being held June 2, 2012.  These are live classes, not webinars. We’ll have time at the end of each class for questions.  There is no one else offering live classes like this that will teach you how to buy tax sale properties in Alabama!  Alabama laws are unique, and you need a local expert familiar with buying tax sale properties in Alabama to guide you.  These classes are suitable for anyone wanting to buy tax sale properties anywhere in Alabama.

Go to the classes page on our website for more information and to register.  These two classes on buying tax sale properties in Alabama will not be offered again in 2012, so don’t miss out!

 

Learn to Buy Tax Sale Properties in Alabama! Classes on June 2, 2012


Do I Have to Pay a Real Estate Tax On My New Home In Prattville Alabama? Part 2

Thursday, February 10th, 2011

Do I Have to Pay a Real Estate Tax On My New Home In Prattville Alabama? Part 2

 

In yesterday’s blog, we talked about the new Federal 3.8% Medicare tax on the capitol gains you make when you sell your home in Prattville, Montgomery, and the River Region, AL, and we used an example to see how the tax is calculated.  Then we asked what happens if the amount of capitol gains (profit) you make when you sell your home is over the $250,000 limit ($500,000 for married couples)?

That’s where another rule, the income limit, applies.  The law says this new Federal Medicare tax only applies to people IRS real estate tax in Prattville ALwhose AGI (adjusted gross income) is more than $200,000 per year ($250,000 for married couples). So if you sell your house and make a profit of more than $250,000, then you need to look at your income to see if you’ll have to pay the tax.  As long as your AGI, including the capitol gain you made when you sold your house, is at or under $200,000 ($250,000 for couples) then you won’t have to pay the tax.  Let’s look at an example:

Let’s say when you sell your house you make a capitol gain of $300,000.  This capitol gain is $50,000 more than the limit according to the law from yesterday’s post.  But you still might not have to pay the Medicare tax because the law allows you to keep $250,000 of the capitol gain without paying any tax on it.  So the other $50,000 profit you made gets counted as part of your AGI.  As long as your AGI, including the profit you made on selling your home, is $200,000 or less that year, you won’t have to pay the tax.

So let’s continue with the example we used above and start with the $50,000 amount of excess capitol gain you made when you sold your house.  Add this amount to your AGI.  If your AGI plus the excess capitol gain totals more than $200,000 then you will have to pay the tax, but only on any part that is over the AGI limit.  If your AGI plus the excess capitol gain totals $200,000 or less, then you won’t have to pay the real estate tax.  It’s that simple.  Consult your accountant or tax preparer for advice specific to you and your situation.

The new Federal Medicare tax on capitol gains from selling a home don’t go into effect until January 1, 2013.  And you’ll still be able to deduct your mortgage interest every year on your income taxes like you have previously been able to.

That nasty rumor about everyone having to pay a real estate tax when they sell their home really scared a lot of people.  But now, looking at some examples of how the new law applies, you can see that the new Federal real estate tax on excess capitol gains from the sale of a home is really not so scary after all.

Why would a real estate agent who works only for buyers write a blog about something that might happen when you sell your home?  The answer is simple.  When you buy a home for sale in Prattville, Montgomery, and the River Region, AL, you think about what might happen in the future when you sell your house.  Remember that as Guaranteed Buyer’s Agents, we help you buy smart so you can make a bigger profit when you sell your home later.

 

Do I Have to Pay a Real Estate Tax On My New Home In Prattville Alabama? Part 2

 

 

 

Do I Have to Pay a Real Estate Tax On My New Home In Prattville Alabama? Part 1

Wednesday, February 9th, 2011

Do I Have to Pay a Real Estate Tax On My New Home In Prattville Alabama? Part 1

 

There’s a nasty rumor going around out there.  Recently someone started a rumor that soon every home owner will have to pay a real estate tax when they sell a home in Prattville, Montgomery, or the River Region, AL.  They claim that this real estate tax was hidden within the Federal health care bill.  They even called it a “sales tax.”

But it’s not true.  At least, not the way the rumor told it.  While it is true that there is a 3.8% Medicare tax that high income households MIGHT have to pay when they sell real estate, it only applies to people whose income and proceeds from the sale of their house are over the limits that already exist.  There are two tests that will apply.  The first is the capitol gains test, which looks at how much capitol gain (profit) you make when you sell your home.  The second test is an income test, and we’ll talk about that next time.

All of this might sound a little confusing, so let’s look at an example.

Right now, individual people who sell their homes don’t have to pay any tax on the capitol gains (or, in other words, the profit they make on selling their home) as long as the amount of the capitol gain is less than $250,000.  For married couples, the limit is $500,000.  So let’s say you bought your house 10 years ago and paid $100,000.  Let’s say that you want to sell it now, and that you are willing to pay 3% of the price toward closing costs and 6% of the price toward real estate commissions (real estate commissions and the terms of the contract are all negotiable are aren’t set by law). So if you sell this house you bought 10 years ago for $384,615 or less, you won’t have to pay the tax.  Here’s why:

Start with the sellPrattville & Montgomery Capitol Gains Taxing price of $384,615 and subtract the amount you have agreed to pay for closing costs.  Then subtract the amount you agreed to pay for real estate commissions.  This leaves $350,000.  Don’t forget to subtract the price you paid for your house 10 years ago, which is $100,000.  So after everything is subtracted, in our example you made a profit (or a capitol gain) of $250,000 when you sold your home.  Since the capitol gain you made is $250,000 or less, this means you won’t have to pay the new Federal 3.8% Medicare tax on the profit you made. Remember, these numbers are just an example. Your numbers may be different.

So what happens if you make a capitol gain MORE than $250,000 when you sell your house? We’ll cover that in the next post, “Do I Have to Pay a Real Estate Tax On My New Home In Prattville Alabama? – Part 2.”

 

 

Do I Have to Pay a Real Estate Tax On My New Home In Prattville Alabama? Part 1