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Mr Zimmerman was helpful and kind and prompt . He always answers his phone and that is refreshing . I will be using him for my bankruptcy in the future. He is one of the good ones . He is an outstanding attorney who truley care . He made ev...
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Mr. Zimmermann is a fantastic bankruptcy attorney who handled my case with care, efficiency and urgency. We were able to beat a judgement against me in the nick of time, and I truly feel a sense of relief due to the services of Mr. Zimmerma...
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This Lawyer will go above and beyond for you. As well as show tremendous empathy for those who are vulnerable and scared. His compassion to help civilian's shows through his actions and with his word. When he says he is going to call he cal...
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I’ve worked with Mr.Zimmerman on two different legal issues. In both instances he was fantastic! He is extremely knowledgeable and compassionate and able to breakdown a course of action into language anyone can understand. I would highly re...
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I highly recommend Mr. Zimmermann as an attorny. I recently purchased an investment property and boy was he helpful. He was easily available, very clear in explaining various concepts, laws and regulations, and provided very helpful tips o...
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- posted: Oct. 08, 2024
Throughout New Jersey, rapidly rising prices in residential real estate have greatly benefited those people who have sold their homes. But if you’re looking to reap the profit from the appreciation in your house’s value, it is critical to be aware of the capital gains taxes you might have to pay.
Capital gains taxes are imposed on the on the profit made from the sale of certain assets, such as real estate. However, it is not as simple as subtracting the purchase price from the sale price and sending a percentage to the government. By working with a seasoned real estate attorney, you can understand the exemptions and complex provisions that could affect the amount you are responsible for paying.
When evaluating the capital gains tax associated with your home sale, you should be aware of the following:
Individual and married couple exemptions — If the property is your primary residence and you have owned it for at least two years, you should qualify for a substantial exemption that can sharply reduce your capital gains tax exposure, or eliminate it entirely. This exclusion allows an individual seller to reduce the taxable portion of the profit by $250,000. For married couples, the exemption is doubled to $500,000.
Cost basis increases for home improvements — In most cases, homeowners continue to invest in the value of their home while they own it. Funds used for capital improvements such as renovations, additions, improved heating/cooling systems, swimming pools and other items can be added to the property’s cost basis. Accordingly, the profit calculated for tax purposes would go down.
Adjustments for seller’s costs — Expenses related to selling your home, such as real estate agent commissions, legal fees and advertising costs, can also be deducted from your sale price when determining your gain.
Rates for taxpayers at various income levels — Capital gains tax rates for home sellers are usually 0, 15 or 20 percent, depending on the income of the seller(s). Transactions involving rental properties owned for less than a year could be subject to the standard income rate.
At the Law Offices of James C. Zimmermann, we provide insightful, personalized guidance to New Jersey clients from the time they start to consider a home sale through the closing of the property transaction. To discuss the law pertaining to capital gains taxes or other residential real estate matters, please call 973-764-1633 or contact us online for a free consultation. Our offices are in Vernon, Wayne, Pompton Lakes, Hackensack and Nutley.
