Archive for the ‘Real Estate’ Category

How Does Capital Gains Tax Affect Property Owners?

Thursday, September 30th, 2021

Man's hands calculating  capital gains tax.

President Biden has proposed a capital gains tax increase. At the time of writing this blog post, it has not yet passed. But, many are wondering how this increase would affect them when they sell their real estate holdings.

When was capital gains tax implemented?

Capital gains tax has been in existence as far back as 1913. Taxes were calculated at the ordinary tax rate of the time. The capital gains tax rate has been lower than the top ordinary income tax rate since the 1950s. The percentage of taxation and rules about the sale of capital assets has changed over the years.

Capital assets are homes, cars, investment properties, stocks, bonds, and collectible art with a useful life longer than one year. An asset sale can result in a short-term gain or a long-term gain. Assets held less than a year are considered short-term gains. Long-term gains pertain to assets held longer than one year.

Ordinary tax rates apply to short-term gains. Tax rates on long-term capital gains vary by filing status and income bracket; rates range from 0%, 15% to 20%. Higher-income taxpayers may have to pay an additional 3.8% net investment income tax (NIIT).

Let’s take a look at how capital gains affect real estate.

If you sell your primary residence, you first need to determine if you realize a loss or a gain. To calculate that information, you need to determine your basis. The basis is generally what you paid for the home. You can include the cost for some improvements, but not the expense for regular maintenance and repair of the house. A good rule of thumb is that improvements must add value to the property, change its use, or increase longevity. Consult with your tax professional to learn what can and can not be included to determine your basis.

Special exemptions apply for primary residences if you live in the home for two of the previous five years before the sale date. You also must have owned the house for at least two out of the last five years. They do not need to be the same two years for each requirement. You can only use this exclusion once every two years. There may be exceptions that can disqualify you, which is why you will need to consult with a tax preparer before filing your income tax return. 

If you qualify for the exemption, you will be able to exclude up to $250,000 of capital gains if you are a single tax filer and up to $500,000 of capital gains if you are married filing jointly. 

If you own a second home, it will not qualify for the capital gains exclusion. For example, you own a beach home that you live in for two months out of the year and rent out at other times.

How do capital gains apply to investment properties?

Investors must meet the requirements of living in the home to qualify for the exemption. If you have not, you will not be eligible for the exemption when you sell your investment properties.

Investment properties can also fall under short-term and long-term capital gains. The tax rate for this investment is calculated according to the ordinary income tax rate for your tax bracket if you held it for less than one year. Flipped houses usually fall into a short-term capital gains tax category because investors want to refurbish the home and turn it over quickly.

Any capital gains on an investment property held at least a year would be subject to long-term capital gains tax rates for the investor’s tax bracket.

Like a primary residence, you will need to calculate your cost basis, including purchase cost and any qualifying improvements. You calculate your gain by subtracting your sales price from your cost basis.

A 1031 Exchange can defer capital gains.

If investors want to sell a particular property and invest in a like-kind property, they may qualify for a 1031 exchange. This classification allows the investor to sell now and defer paying capital gains. A third-party facilitator is required to handle the process. The investor is under strict time limits to complete the exchange. The replacement property must be identified within 45 days and close within 180 days of selling the property. In the event of a missed deadline, capital gains tax is applicable.

What are the possible effects of the proposed changes?

The Biden administration’s proposed capital gains tax changes would increase the capital gains tax rates and limit the use of 1031 Exchanges. The proposal includes raising the capital gains tax rate to 39.6% for people making over $1 million per year. It is important to remember that this proposal will affect all capital assets, not just real estate, as we are talking about here.

It may seem that the capital gains tax will not affect many, but in areas where the cost of real estate has skyrocketed, that could be another story. For example, if the property has a low basis, the seller may make a significant capital gain when selling. This considerable gain could put them in a higher tax bracket triggering a higher capital gain tax rate.

Another area of concern in the proposed capital gains tax changes is eliminating stepping up the basis of inherited property. The capital gains on inherited properties are calculated on the home’s fair market value at the time of death or “stepping-up” the basis of the property from the owner’s original purchase price. Utilizing the stepping-up practice reduced the amount of capital gains the estate would be taxed on. 


Because of the increase in prices in New York, this could become an issue for families selling or inheriting long-held estate properties. You can find out more about the proposal’s effects on inherited properties in this recent article from Bankrate.

Should you sell your investment properties?

Real estate investors may be wondering if it is time to sell their investment properties. The answer is as individual as the investor. For example, if you need to sell and your property has held its value, it may be a good time for you to sell. In contrast, you may want to hold onto the property if the value has decreased yet the area expects to increase, and you don’t require cash right now.

There are so many variables to the proposed tax changes; you need to consult with a tax professional to understand how your portfolio will be affected and what the best next steps would be for you. It is unknown what the final changes will be in this proposed legislation and how far-reaching the effects will be.

Contact me, Charles D’Alessandro, your Brooklyn Real Estate Agent with Fillmore Real Estate. As a Brooklyn real estate agent with over 30 years of experience, I can help you find the right home for your primary residence or investment. I can be reached by phone at (718) 253-9500 ext. 1901 or by email at [email protected].

Charles D'Allesandro

Is It True? Answering Myths About Real Estate Agents!

Monday, August 30th, 2021

real estate agent writing myths or facts

There are many myths about real estate agents floating about; many have been hanging around for years. Since 1900 real estate has been a profession, and many myths about real estate agents still exist.

Having over 30 years of experience in the Brooklyn real estate market, I can address these misunderstandings. In addition, I think I may have answered questions from family, friends, and clients over the years related to all 15 of these myths.

Real estate agents earn a 6% commission.

It is important to remember that commission is always negotiable. But, an average commission would be around 6%. That is a contractual agreement between the seller and the listing agent and brokerage they choose to sell their home. After a home sells, the 6% commission is split between the brokerage representing the seller and the brokerage representing the buyer. Assuming that is a 50/50 split, each brokerage receives a 3% commission.

The commission is split even further between the brokerage and their agent, depending on their agreed-upon split. For example, if that split were 50/50, the brokerage received 1.5%, and the agent received 1.5%. From the agent’s 1.5%, the fees the agent pays the brokerage are deducted. An individual agent in this scenario may only receive 1 – 1.5% of the sales price in commission depending on the brokerage fees they are required to pay. Although it sounds like a high commission, after splitting the commission several ways and paying for fees, you can see the agent only receives a small percentage of the total.

Real estate agents receive a salary.

Real estate agents receive compensation on a commission basis. Agents do not receive payment until the property closes. They work for 2-3 months or more before ever receiving any compensation for their time. If the sale falls through, an agent will not receive payment for their time and effort invested in the transaction.

Lenders, title companies, and inspectors pay real estate agents a kickback.

Kickbacks are defined as “an illegal payment intended as compensation for preferential treatment or any other type of improper services received.” An agent may have a legal arrangement with preferred service providers but must disclose their interest in any partnership to their clients. The U.S. Housing and Urban Development oversees the Real Estate Settlement Procedures Act (RESPA), which includes disclosure laws and prohibits kickbacks, referral fees, and unearned fees. RESPA is a highly regulated act. 

Real estate agents get reimbursement for their expenses.

Agents are not reimbursed for expenses from their brokerages. This is because they are running their own small independent business under the umbrella of their brokerage. Therefore, they are responsible for their expenses, including gas, car expenses, insurance, office supplies, office copies, renting a desk within the broker’s office, E&O insurance, MLS fees, etc. 

The real estate agent’s brokerage pays for marketing and advertising expenses.

Many brokerages advertise as a group. It appears that the brokerage is adverting properties, but in actuality, the agent is paying to participate in the ad. Like other general business expenses mentioned above, the real estate agent is responsible for all marketing and advertising expenses. These include professional photos, staging, brochures, advertising online and in print, etc.

Real estate agents get rich quickly.

Real estate sales is not a get-rich-quick career. Having 3-6 months’ worth of living expenses is a good rule of thumb for new real estate agents as they begin their careers. An agent can work with a buyer or seller for months before a property goes under contract. Once under contract, it can take 45-60 days for a home to close and the agent to receive their first commission check. Maintaining a consistent income takes discipline and a ton of effort for real estate agents. There is constant lead generation, contract preparation, listing appointments, showing homes, negotiating contracts, and facilitation of the closing that keep a real estate professional working long hours. Reaching a high percentage of referrals from past clients, friends and family is the goal of all career real estate agents. It takes time to build those relationships.

Real estate agents make too much money.

The National Association of Realtors tracks the average income of real estate agents annually. In 2019, the nationwide average was $49,700. Their study shows that agents with 16 years or more of experience average $86,500. Many find these statistics surprising. The confusion comes from agents advertising they are multi-million dollar producers. Multi-million dollar refers to the total sales price of the homes they sell. If an agent sold $2,000,000 in homes that averaged $250,000 each, they only sold 8 houses and may have only earned around $30,000, but they technically qualify as a multi-million dollar producer. That is a far cry from actually earning a million dollars.

Real Estate Agents are expensive to hire.

Hiring a real estate agent may cost you, but not hiring a real estate agent can cost you more. For example, did you know that sellers who choose to sell for sale by owner usually end up selling their home for less than they could with a real estate agent representing them? Not knowing the legalities of a real estate transaction can also cost you money. A real estate professional understands the local market and stays current on trends and issues that may affect a real estate transaction. If you are not a real estate agent yourself, do you have time to learn all the intricacies of the market?

Signing a contract with a real estate agent means you are stuck with them.

You should understand the terms of any contract before you sign. Most listing contracts and Buyer agency contracts have a defined period that will be effective. Ask the agent questions to understand how you can remedy any issues in your working relationship. For example, many brokerages will allow you to cancel or switch to a different agent within the brokerage to fulfill the contract period if you are dissatisfied with the agent you first contracted.

Working directly with a listing agent will save me money.

As a buyer, working with a listing agent can be a costly move. The listing agent’s fiduciary responsibility is to the seller. They may not have your best interests at heart. Representing both parties in a home sale is a tricky situation. This type of representation is Dual Agency. Some states permit dual agency, and others prohibit it. The states that prohibit dual agency are Alaska, Colorado, Florida, Kansas, Maryland, Texas, Vermont, and Wyoming. Here is a link to a previous blog post that discusses additional mistakes buyers may make.

A real estate agent can’t sell you a For Sale By Owner.

Most sellers who choose to sell their homes For Sale By Owner will pay a commission to the agent who brings a buyer. They are happy only to pay part of the commission. Because buyer agency is so common now, For Sale by Owners know that most buyers want to work with an agent. If they are not willing to pay the commission, they could lose many potential buyers. If you see a For Sale By Owner, it is best to have your real estate agent contact them first. Your agent can discuss the commission issue and set an appointment for you to see the home.

Real estate agents want you to pay higher prices because they earn more.

When you work with a buyer’s agent, their fiduciary responsibility is to you and your best interest. An agent will indeed make a higher amount based on the sales price. But the additional amount they would make would not be an incentive to disregard their duties to you as their buyer’s agent. A $10,000 difference in sales price would only net the agent approximately $150 more based on a 3% commission and a 50/50 split with their broker. A code of ethics governs a real estate professional. They take their responsibilities seriously. Not doing so could end up with a fine or suspension of their license.

Real estate agents can only show you their company’s listings.

An agent who is a member of the local Multi-List Board can show you any property listed in the MLS regardless of which company holds the listing. It is rare to find an agent who is not a member of the Multi-List these days. Therefore, the brokerage that offers the home for sale is statistically not the same brokerage that sells the home.

Real estate agents can work whenever they want.

Real estate agents are independent contractors. They do not have to punch a time clock every day. However, they do need to be available when their clients are available. So what may look for the outside as a flexible schedule may not indeed be. You may see your local real estate agent at the gym in the afternoon, but what you may not see is your local real estate agent working in the evening showing homes to their clients or missing an event because their client needs them.

National website portals are better than real estate agents.

National website portals have changed the way real estate agents do business. But it has not replaced an excellent local real estate agent. Real estate portals are fed through the local MLS. It takes time for a property to upload from the MLS to the website portals. Some days it seems to happen quickly, and other days it takes longer for that to occur. Your real estate agent can set up a search in the MLS to notify you when a new home is listed that meets your criteria. Getting that information quickly has been a definite advantage in the local sales market we have been seeing. Relying on your local real estate expert is the better route to take. Your local expert knows the market and has information that the national website portal may not provide.

I hope this gives you a better glimpse of what it is like to be a real estate agent. Most real estate professionals do what they do because they love helping people. They are great problem solvers and lifelong learners. Every real estate sale is different, and agents are continually honing their skills. 

Contact me, Charles D’Alessandro, your Brooklyn Real Estate Agent with Fillmore Real Estate. As a Brooklyn real estate agent with over 30 years of experience, I can answer your real estate questions. You can reach me by phone at (718) 253-9500 ext. 1901 or by email at [email protected].

Charles D'Allesandro

It Takes a Village To Buy or Sell in the Brooklyn Real Estate Market!

Friday, October 30th, 2020
Couple Holding keys to their new home

Buying or Selling a home in the Brooklyn Real Estate market can be a complicated process. Truly it takes a village of people for the purpose of completing just one home sale.

Wikipedia explains the phrase “It takes a village to raise a child” as an African proverb. It means an entire community of people must interact with children to experience and grow in a safe and healthy environment.

The phrase “It Takes a Village” has been adapted over the years for other references. In fact, it is a great explanation of what the home buying and selling experience is like in the Brooklyn Real Estate Market.

How many different parties do you think are involved in one real estate transaction? You may find it surprising. Let’s take a look.

SELLER

First, you need to find someone ready to sell their home. We often hear the term “Motivated Seller.” What would make a homeowner a “motivated seller?” Motivation to sell a home can come for many reasons.

When a buyer hears the seller is motivated, it may trigger many thoughts.
  • There is room to negotiate the price.
  • The owner may be open to making concessions to consummate the sale.
  • There are material defects to the home or property that the seller doesn’t want to address.
  • The home is near foreclosure.
  • The seller is ready to take the home off the market and wants to see any offer.
  • The seller is in a financial bind.
  • The owner MUST sell now.

Determination, not desperation, may be what motivates a seller.

There are many reasons a seller would want to sell a property that is not related to the desperation thinking above.
  • Job relocation
  • Downsizing
  • Upsizing
  • Retiring to a new location
  • Divorce
  • Settle an estate

Knowing the seller’s motivation would be an advantage in negotiations. However, you may or may not understand the seller’s reason for selling when you place your offer. 

BUYER

Next, you need someone qualified and ready to purchase a new home. Obtaining a pre-approval from a reputable lending institution makes you a qualified buyer. They also have proven they have the necessary funds and qualifications to buy a home in the Brooklyn Real Estate Market. The reasons someone may be interested in purchasing a home vary as much as the reasons a seller would want to sell.

Some reasons to purchase may be:
  • Achievement of “The American Dream”
  • Sound investment
  • Build equity
  • Potential tax benefits

The buyer’s motivation is as important as the seller’s motivation. An apathetic buyer can take a home off the market for some time and then decide to terminate the sale. Your real estate agent can help you vet the buyer’s motivation. Unfortunately, you would need to have a crystal ball to definitely know what will happen.

LENDER

In hopes of financing the home, the buyer will choose a financial institution for their mortgage. Surprisingly, the lowest interest rate is not always the best option. You may want to compare several lenders.

Obtaining an estimate of the lender’s fees can be eye-opening. Some things you will want to compare are:

  • Interest rates
  • Lender fees
  • Cash required to bring to closing

By all means, it is essential to find a reputable lender who is knowledgeable in lending in your area. Out of state or internet mortgage companies may not know the intricacies of a home purchase in the Brooklyn Real Estate market.

The lender should do a thorough analysis of the buyer’s financial situation to determine if they qualify for a mortgage. The buyer should offer evidence of their qualifications when they make an offer on the property.

There is a difference between a pre-qualification and a pre-approval. A pre-qualification provides the buyer with a general estimate of what they can afford. A pre-approval is more valuable because the buyer’s credit has been checked, and documentation has been verified to approve the buyer for a specific loan amount. A pre-approval can be valid for 60-90 days and should be re-verified to confirm no buyer’s status changes.

REAL ESTATE AGENTS

Typically you will find two real estate agents involved in any Brooklyn Real Estate sale. The first agent works on behalf of the seller, helping them prepare their home and price it competitively. The second agent represents the buyer and helps evaluate an offering price and terms once the right home has been found.

The real estate agents work together, bringing the buyer and seller to an agreement on the best terms possible.

You will want to find a trustworthy agent to represent you in either a sale or purchase.

What are the qualities of a trustworthy agent?
  • Local Market Expert
  • Proactive
  • Knowledgeable
  • Good Communicator
  • Educated

Your real estate agent should hold the designation of Realtor®, which means they belong to the National Association of Realtors® and their local Board of Realtors®. Notably, a member of these associations must follow guidelines to ensure they are fair and ethical in their business practices.

Home Inspection Checkmark

HOME INSPECTORS

A critical component of the buying process is the home inspection. The purpose of the home inspection is to determine if there are any major ticket items or safety issues affecting the home. In reality, these are items that the seller may not have been aware of. Nitpicking the seller for trivial issues or updates that were visible upon your visit to the home is not the purpose of a home inspection.

The home inspector will usually look at the following areas of the home:
  • Exterior structure
  • Roof
  • HVAC System
  • Hot Water Heater
  • Electric Panel
  • Outlets
  • Windows
  • Plumbing in kitchen and baths
  • Attic

Be sure to check the credentials of the home inspector you choose. There are certifications required for home inspectors in the Brooklyn Real Estate market.

The home inspector will highlight areas of concern. You will also learn from the inspector the home components that may need to be replaced in the future. With this information in hand, you can make an informed decision about whether this is the right investment for you.

LAWYER

You will most likely need to hire an attorney to represent you either as a buyer or a seller when purchasing in the Brooklyn Real Estate market.

What is the lawyer’s role in a real estate transaction?
  • Write and negotiate the sales agreement.
  • Represent their client’s best interest.
  • Review closing documents.
  • Attend the closing to ensure a smooth transition.

For more information on the importance of real estate lawyers, see this previous blog post that explains it all in detail.

TITLE COMPANY

The title company researches the history of homeownership to determine the buyer receives a clean title to the property when they take possession of the home. In the event that they find any issues on the chain of title, they will resolve them before closing.

They will also research any judgments, liens, outstanding mortgages, or unpaid taxes on the property.

The title company will then prepare a report (abstract of title), revealing all the research findings. This document will validate the title of the property.

Title insurance is issued to protect the lender and new owner against any lawsuits or claims undetected on the original title search. The lender will require a title insurance policy.

If you are a cash buyer, it would be your decision to purchase title insurance. Although, if you are purchasing a home with cash it is highly recommended that you purchase the title insurance policy.

APPRAISER

An appraiser will visit the home to prepare an opinion of value for the lender. Do not confuse the appraisal with a home inspection but, the appraiser may note any safety issues that are apparent to them. Requirements for an appraiser and a home inspector are different. An appraisal is not a substitute for a home inspection.

An appraiser will prepare a report called an appraisal that will provide their opinion of value based on several factors.
  • Location
  • Structural Construction
  • Age
  • Bedrooms
  • Bathrooms
  • Condition
  • Square Footage
  • Recent Neighborhood Home Sales

Providing a fair and unbiased assessment of the property can be accomplished by randomly assigning appraiser through a third party.

The cost of the appraisal is an expense the buyer will pay. This is a requirement of the buyer’s lender.

In the event that the home does not appraise for the amount of the sales price, it can trigger a negotiation between the buyer and the seller. If both parties come to an agreement acceptable to the lender, the sale will be completed.

UNDERWRITER

The underwriter works for the lender. Their role is to review the buyer’s information and the appraiser’s opinion of value to determine if the mortgage can be issued for the purchase price agreed upon. The underwriter will evaluate that granting the mortgage to the buyer is a sound investment for the lender.

An underwriter will look at several different areas to determine any risk of the buyer defaulting.
  • Credit and payment history
  • Income and assets of the buyer
  • Downpayment
  • Appraised home value

The underwriter may need to request additional information to clarify any uncertainties that arise to be sure lending the money to the buyer is a solid investment for the bank/lender.

The last hurdle in the process of buying or selling a home is clearing underwriting. The type of loan, buyer’s financial situation, title issues, survey issues, and missing paperwork will all affect the time the underwriter will need to complete the process.

Once they have completed their review, the Underwriter will issue the loan a “Clear to Close” status!

TEAMWORK

Real Estate Team

Buying or selling a home in the Brooklyn Real Estate market involves many parties and this doesn’t include assistants and others within these companies who help. It really does take a village to pull all the pieces of buying or selling a home together.

That is why it is so important to hire the right Realtor® to work for you, whether you are buying or selling a home. Coordinating all these parties takes a thorough understanding of the sale process and experience in the local market.

Charles D'Alessandro

Contact me, Charles D’Alessandro, your Brooklyn Real Estate Agent with Fillmore Real Estate. As a Brooklyn real estate agent with over 30 years of experience, I can help both buyers and sellers coordinate all the details.

In the event our office is shut down we are always committed to your safety during the COVID-19 health crisis in compliance with the State of New York public health policies. I can be reached by phone at (718) 253-9500 ext. 1901 or by email at [email protected].

It’s In Your Best Interest to Hire a Lawyer

Monday, September 30th, 2019
Hire a lawyer
Buying or selling, hire a lawyer A real estate attorney is worth every bit of the peace of mind they give!

Whether buying or selling real estate, it’s in your best interest to hire a lawyer to represent you through the transaction process. Because even the simplest real estate deals come with complicated legal language, terms, and conditions. Besides, New York is one of twenty-two states which requires the presence of a lawyer during real estate closings.

Why It’s Important to Hire a Lawyer

The buying or selling transaction process involves attorneys, title insurance companies, property surveys, real estate agents, buyers, sellers, and mortgage brokers or bankers. And all of these people have their own sets of paperwork and legal jargon that may overwhelm you. A real estate attorney understands and sorts through the jargon and ensures your legal rights are protected.

There are also times when residential real estate transactions begin well, but disputes pop up during the process. And every real estate transaction should be fair and impartial for both seller and buyer.

Real estate transactions are expensive. But if they’re mishandled, they can result in problems for the buyer for years after the purchase.

What Lawyers Do to Help You with the Transaction Process

1. Lawyers Draw Up and Negotiate the Terms of the Contract of Sale

The seller’s attorney draws up the contract of sale with the price and terms and conditions already agreed upon between the buyer and seller. Some items included in a contract of sale include:

  • Down payment (usually ten percent of the purchase price)
  • Mortgage contingency (the time the buyer has to obtain a mortgage commitment, usually 30 to 45 days)
  • Approximate closing date
  • List of repairs that need to be done by the seller and appliances, fixtures, and all items that stay after the sale is completed

2. They Protect Your Best Interest

As a buyer or seller, your lawyer is there to make sure all documents you sign are in your best interest.

Your real estate attorney is also the mediator between the bank, title company, and real estate agents. They are there to coordinate the closing and make sure the monies are distributed properly.

3. Real Estate Attorneys Attend Closing Time

Ownership is transferred from the seller to the buyer at closing time, and their papers to be signed and checks to be passed around.

The closing is attended by both the buyer’s and the seller’s attorneys, the lender’s attorney, and a representative from the title company. And each represents their clients’ best interests.

Seller’s Attorney

The seller’s attorney is there to handle the payoff of the seller’s:

  • Mortgage
  • Back taxes, if any
  • Fees
  • Other payoffs due at this time

This is done through the title closer.

Buyer’s Attorney

The buyer’s attorney is there to:

  • Ensure the terms of the contract are followed
  • Make sure mortgage documents are all in proper order
  • Ensure that everything that was agreed upon by the seller to the borrower (buyer) is honored
  • Make sure a clean title is transferred to their client, the buyer

And Others Who Attend the Closing

Title Closers

Title closers are there to represent the title insurance company and their client, the buyer.

Title Company

The title company attends the closing to:

  • Ensure all liens, fees, and any existing bills are paid
  • Make sure a clean title of ownership is transferred to the new owner

Lender’s Attorney

The lender’s attorney is at the closing to represent the mortgage given to the buyer.

Bank Attorney

The bank attorney, as we call them, is there to:

  • Have all the documents signed by the borrower (buyer)
  • Collect any remaining fees due to the lender by the borrower

Hire a Lawyer – It’s a Small Price to Pay

As you can see, there is much to deal with in real estate transactions. And the price to pay to hire a lawyer for peace of mind is small.

If you’re buying a home in New York, you must hire a lawyer to negotiate the contract of sale and represent you at closing. So, do your research to find and hire a lawyer who will truly represent your best interest.

If you need to buy or sell your home, contact Charles D’Alessandroyour Brooklyn Real Estate Agent with Fillmore Real Estate. Call (718) 253-9600 ext. 206 or email [email protected] 


Charles D’Alessandro
Your Brooklyn Real Estate Agent
718-253-9600 ext. 206

How Will the New Tax Law Affect You?

Tuesday, January 30th, 2018

New tax law

The new tax law: the Tax Cuts and Jobs Act. How will it affect you as a Brooklyn homeowner?

A New Year brings with it new possibilities and changes, even in the world of real estate. Have you heard about the new tax law: the Tax Cuts and Jobs Act? Whether or not you have, you most likely won’t notice the changes that will affect you until you file your taxes in 2019. You may see changes made to next month’s paycheck because of this new tax law and its new tax rate deductions, however.

New Tax Law: How Its Policies Could Affect You as a Homeowner

  1. Capping Mortgage Interest Deduction

On December 15, 2017, the new tax law, the Tax Cuts and Jobs Act, reduced the amount of mortgage interest rate deduction for new loans from $1,000,000 to $750,000. If you took out a loan before December 15, 2017, you are grandfathered into the previous tax policy.

If you want to refinance your existing mortgage balance and still deduct the interest, you can do so up to $1,000,000, but your new loan cannot exceed the amount of your existing mortgage balance being refinanced.

The capping of the mortgage interest deduction poses a risk to large urban areas with high-priced homes such as those here in New York as well as in Washington, D.C., California, Hawaii, and Massachusetts.

The effect of these changes will not be noticed until you sell your home. But the newly purchased property would then come under the new regulations of the new tax law policies.

By limiting your buyer’s purchasing power and capping mortgage interest rate deduction, the growth of your home’s value could be slowed. This could then affect the profits you as a longtime homeowner would hope to gain when trying to sell.

  1. Introducing the New SALT Deduction Limit

Whether filing as an individual or married couple, taxpayers can itemize deductions up to $10,000 for their total state and local property taxes and income or sales taxes in the final bill. The cap is the same for both.

The new SALT limits will impact households that pay more than $10,000 in combined state and local taxes each year. Alexander Casey, Zillow Group Policy Advisor, says, “On one hand, taxpayers who still itemize deductions and whose total state and local tax liability exceeds $10,000 will get a smaller tax break; however, for other households, the continued availability of those deductions, even if they are capped, may be the deciding factor between whether or not they itemize deductions. This matters a lot in areas where SALT deductions were a relatively more significant reason for itemizing – areas with lower home prices, but higher taxes (e.g., upstate New York, Southern New Jersey, Inland California).”

In the law preceding this new tax law, the SALT deduction was unlimited.

Realtor.com® Senior Economist Joseph Kirchner, Ph.D. says, “The new SALT limit will have the greatest impact on states that provide a large number of services to their citizens by, first, reducing the benefit of tax cuts by disallowing the full value of this deduction, and, second, compounding the issue of the standard deduction vs. the mortgage interest rate deduction.”

  1. Preserving the Exclusion of Capital Gains

The previous law stated that homeowners must live in their home for two out of the past five years in order to qualify for the capital gains exclusion. This tax policy hasn’t changed.

Casey also says, “About 10 percent of home sellers last year sold their home after living in it between two and five years. Keeping the status quo means these sellers no longer need to make that difficult choice, and can instead feel more free to list their home on a more flexible schedule without fear of a potentially hefty tax hit.”

An increase to the residency requirement to five of the past eight years was proposed in the Senate bill, but it did not pass to the final version.

Kirchner stated, “Today, homeownership is imperative for middle-class wealth-building and financial stability. It allows people to invest in a long-term asset that pads their retirement savings, provides a safety net for unforeseen circumstances, and equity to back investment in education or small business. The survival of the capital gains exclusion means that the advantages of this type of investment will remain (except, of course, with regard to impact of changes to deductions).”

  1. Deducting on Home Equity Loans

According to the new law, taxpayers will no longer be able to deduct the interest paid on their home equity loans beginning in 2018, unless the funds are being used to improve their residence significantly. This provision expires in 2026 when it reverts back to the previous cap of $100,000 of home equity debt.

“Deductible interest on home equity loans used to provide homeowners another layer of financial security by giving them the ability to obtain low-cost financing,” Kirchner says. “Now, without the ability to deduct interest, owners effectively will have to pay more for their loans, which could put downward pressure on the homeownership rate.”

Casey believes removing this homeownership incentive will not dramatically impact the homeownership rate. But it will affect home renovations instead. About this, he says, “A lot of personal and economic factors matter more. This deduction is more important for financing major home renovations, so eliminating this deduction could contribute to underinvestment in the housing stock, making it more difficult for struggling communities to reinvent themselves.”

  1. Doubling of the Standard Deduction

Also in the previous law, $6,350 was the standard deduction for single taxpayers and married couples filing jointly. In the new law, this amount is nearly doubled to $12,000. The previous standard deduction for married couples filing jointly was $12,700. This has been increased to $24,000.

“A doubled standard deduction will have a big impact on how many homeowners ultimately decide to take advantage of the mortgage interest deduction,” says Casey. “When you combine a much larger standard deduction, with the fact that some itemized deductions have been capped or pared back, many filers may no longer find it financially advantageous to itemize deductions.”

According to Zillow’s calculations, Casey says that under the current tax code, itemizing and claiming the mortgage interest deduction is financially worthwhile on an estimated 44 percent of all U.S. homes. In addition, under the new law, itemizing and claiming the MID is worthwhile on only 14.4 percent of homes nationwide.

“The doubling of the standard deduction changes the equation for homeownership incentives and essentially renders the mortgage interest rate deduction ineffective for the majority of owners,” says Kirchner. “Until now, most households did not itemize their deductions until they bought a home, which added significant tax benefits to ownership. Based on the changes to the standard deduction, this benefit will disappear for all but those homeowners who have mortgages in excess of $550,000, depending on what other deductions they have.”

Location and Timing and the New Tax Law

How much you are impacted by the new tax law will be based largely on where you are located. If you are located in a high-cost state, you may see the biggest changes in how you file, especially with the new $10,000 SALT limit. According to Zillow Research, 51 percent of Americans surveyed last year said they agree with the statement that “the property tax rate in my community is unfair to me.” These sentiments may rise in response to residents of high-tax burdened markets receiving a higher tax bill because of the new limit.

For example, Zillow analysis conducted for the Wall Street Journal states that a top income earner in New York, who owns in the top-third price range of the metro, pays an estimated $23,000 in property and state income tax every year, which is double the amount now allowed for deductions. The analysis also reported $10,000 in similar circumstances for Raleigh, N.C., and $12,000 for a Chicagoan. These are just a few areas where high-earning taxpayers would be adversely impacted by the new SALT deduction cap. According to a Wall Street Journal article, Moody’s Analytics estimates that 80 percent of counties across the country will see a negative impact on home prices in the summer of 2019.

Low-tax states, however, may benefit from the new tax code. According to the WSJ, parts of North Carolina, Alabama, Nebraska, Indiana, and Tennessee may see boosts in their home prices and local economies. And the same Zillow analysis that surveyed high property and income taxes in other states says an individual in a similar financial situation would pay one-quarter of the amount in Nashville, Tennessee. For those that have been on the fence about moving, the tax overhaul may be their deciding factor. But those who live in high-tax states may not see the negative impact from taxes as reason enough to leave their homes.

According to NAR research, here are the five metro areas that will be most affected by the new tax law (based on homes with mortgages valued over $750,000):

  1. San Jose-Sunnyvale-Santa Clara, Calif.
  2. San Francisco-Oakland-Hayward, Calif.
  3. Santa Cruz-Watsonville, Calif.
  4. Santa Maria-Santa Barbara, Calif.
  5. Urban Honolulu, Hawaii

The top five metros based on share of owners that pay over $10,000 in real estate taxes:

  1. New York-Newark-Jersey City, N.Y., N.J., Pa.
  2. Bridgeport-Stamford-Norwalk, Conn.
  3. Trenton, N.J. Metro Area
  4. San Jose-Sunnyvale-Santa Clara, Calif.
  5. San Francisco-Oakland-Hayward, Calif.

In response to the bill’s passing, NAR President Elizabeth Mendenhall said, “Only 6 percent of homeowners have mortgages exceeding $750,000, and only 5 percent pay more than $10,000 in property taxes, but most homeowners won’t itemize under the new regime. While we’re pleased that important homeownership incentives such as the capital gains exclusion survived in conference, additional changes are required to truly incentivize homeownership in the tax code.”

But timing also plays a role. Many of the provisions in the Tax Cuts and Jobs Act, including individual tax cuts, expire in 2025 and therefore, may lead to tax hikes in the future, according to the Distributional Analysis of the Conference Agreement for the TCJA by the Tax Policy Center. The report states that taxes would be reduced by $1,600 on average in 2018, increasing after-tax incomes by 2.2 percent; however, in 2025, the average tax cut as a share of after-tax income would decrease by 1.7 percent for most income groups.

“The tax bill decreases homeownership incentives, but these benefits are not the only factors in the homeownership decision,” Kirchner says. “In the short run, homebuyers can look forward to more money in their pocket that can be used for a down payment or larger home.”

He adds that cuts in government services and economic development programs, along with the rescinding of tax cuts for individuals in a few years and the impact of tax reform-induced deficit on inflation, will weaken the impact of the after-tax income boost on homeownership.

“The change definitely removes some of the federal government’s preferential treatment towards homeownership,” Casey says. “Ultimately, with these new reforms, households will be more likely to maximize their tax breaks with a standard deduction. And when someone uses the standard deduction, it doesn’t matter if they spent an extra $5,000 on a house, a boat or a vacation—the spending is treated the same when tax season comes.

“It will be interesting to see how the temporary nature of some of these tax cuts shake out,” says Casey. “Will those households on the edge of homeownership make decisions based on what their new take-home income is in February, or will there be some apprehension if they think their taxes will rise down the road?”

According to an NAR statement, “As a result of the changes made throughout the legislative process, NAR is now projecting slower growth in home prices of 1-3 percent in 2018 as low inventories continue to spur price gains; however, some local markets, particularly in high-cost, higher-tax areas, will likely see price declines as a result of the legislation’s new restrictions on mortgage interest and state and local taxes.”

If you have any questions about how the new tax law will affect you, call Charles D’Alessandro at (718) 253-9600 ext. 206 today.

This article was largely taken from RISmedia.com’s article “Tax Reform: Here’s What Could Impact Homeowners Most.”

Charles D’Alessandro

Your Brooklyn Real Estate Agent with Fillmore Real Estate

718-253-9600 ext. 206

[email protected]

Charles D’Alessandro: A Successful Real Estate Agent with Heart

Monday, May 15th, 2017

Real estate agent

A drive for excellence sets Charles D’Alessandro apart from the rest. He’s a real estate agent with heart.

“People don’t care what you know until they know that you care.”

Charles D’Alessandro is not as different from the rest of us as you may think. He’s just a regular guy, born and raised in Brooklyn, who loves a great a slice of New York pizza. He loves football, New York Yankee baseball, and his job as a real estate agent at Fillmore Real Estate in Brooklyn, New York. But there is a difference. He has heart. He has passion. And he puts it into everything he does. This sets him apart from other real estate agents and people in general, for that matter.

A Passionate, Motivated, Excellent Real Estate Agent

Charles is a spirited individual. His passion for excellence and having fun with whatever he does motivates him to succeed. Whether it’s his family or his business, he exceeds expectations. And that desire for excellence has brought him success as a leading Brooklyn real estate professional.

For over 30 years, he’s been helping people achieve their dreams of owning Brooklyn homes, condos and co-ops. His credentials are numerous and varied:

Real estate agentReal Estate Agents Serving Brooklyn with Fillmore’s Best

Charles always has his finger on the pulse of Brooklyn, East Flatbush, and Marine Park real estate. He is Vice President Division Manager for Fillmore and is also the office manager of Fillmore’s 2926 Avenue J office. His sales staff consists of 35 Realtors all living in and serving the Brooklyn community the ‘Fillmore way.’ Charles considers them to be “Fillmore’s Best.”

From 1999 to today, our Brooklyn Fillmore real estate office has broken sales records and won awards. It remains one of Brooklyn’s top real estate agencies. “We’re proudest of the extraordinary level of personalized service we bring to our clients. Our goal is and always will be to amaze our clients and customers with the quality of our services. They have my personal guarantee that they will not find a more complete and satisfying real estate service anywhere,” Charles says.

Born and raised in the Gravesend neighborhood of Brooklyn, Charles is a Brooklynite through and through who speaks “Brooklynese”! He attended Our Lady of Grace Elementary School, Abraham Lincoln High School, and Kingsborough Community College. Today, he is married to the love of his life and lives in the Marine Park area where he raised his two sons.

Charles’ firsthand knowledge of the Brooklyn real estate market and its neighborhoods is valuable when you’re looking to buy or sell your Brooklyn home. His 30+ years of experience as a Brooklyn real estate agent allows him to offer indispensable knowledge, integrity, and ability to you as a buyer or seller. He speaks your language. He works for home buyers and sellers and tries to advise and consult them in the best way he knows how. At the end of every day, no matter how things may have turned out, he feels great, because he always does his best for his clients and customers.

What Others Have to Say

Find out what others who have worked with Charles have to say about him here on his Testimonial Tree and visit his About Page.

Brooklyn’s Best Real Estate Agent is on Your Side

If you’re buying or selling Brooklyn real estate, you want a real estate agent who is on your side. You want someone who cares about this important decision as much as you do. You won’t find anyone who cares more than Charles D’Alessandro. Call your Brooklyn real estate professional today at 718-253-9600 ext 206 or email him at [email protected]

Remember, you and your family deserve the best in Brooklyn, Queens, and Staten Island!

Downsizing in Brooklyn – Thinking Big by Living Small

Wednesday, October 15th, 2014

downsizing in Brooklyn

Downsizing in Brooklyn – thinking big by living small

by Charles D’Alessandro | Leave a Comment

What is downsizing? It is the concept of living simpler, utilizing space to its fullest. It is having fewer financial burdens, living in a home that requires minimal maintenance. It is getting rid of excess stuff that has been accumulated over time and paring down to basic essentials. After all, how much stuff do we really need to live a normal life? How much living space do we really need? There’s a trendy movement among us called micro-living. Fans of micro-living swear by it, and they are encouraging others in Brooklyn to start thinking big by living small.

Many people live beyond their means and accumulate stuff over time. Living beyond your means creates one or more of the following realities in day-to-day life that must be dealt with, sooner than later:

  • Excessive debt
  • Too much stuff
  • Debilitating stress

Enter the desire for change, the desire for simplicity, the desire for downsizing. Downsizing in Brooklyn can be stressful, but the benefits listed below far outweigh the negatives. Advocates of micro-living say downsizing will:

  • Increase cash flow
  • Provide more time
  • Lower utility bills
  • Reduce consumption
  • Minimize stress

Downsizing in Brooklyn requires:

  • Assessing your actual needs
  • Prioritizing needs versus wants
  • Getting rid of clutter. (If you don’t need or use an item within 6 months, give, sell or throw it away). (When you come across boxes of items that haven’t seen the light of day for years, get rid of them at once. You don’t need them).
  • Donating electronics and furniture
  • Moving to within walking distance of work, grocery shopping and downtown amenities

Once your downsizing in Brooklyn is complete, try to stay organized. Be ruthless about what enters your space. Then, relax and enjoy surrounding yourself with only those things that are truly most important to you. You’ll be able to rest a little easier knowing that a move to living a simpler life will be smoother, too.

And, of course, your Brooklyn area real estate agent, Charles D’Alessandro, your Brooklyn real estate agent with Fillmore Real Estate, knows where the smaller and good-quality houses are. I will find you just the right location to meet your needs for downsizing in Brooklyn. Contact me by email at [email protected] or by phone at (718) 253-9600 ext. 206 today.

Spring Time Have the Best Garage Sale at Your Brooklyn Home

Sunday, April 21st, 2013

Have a Garage Sale at your Brooklyn Home

Have a Garage Sale at your Brooklyn Home

Spring time is here. It’s that time of year again… time for spring cleaning, and to have a garage sale at your Brooklyn home!  This year, you can have your most successful garage sale ever.  Here are a few tips to help:

·        Advertise your sale in local newspapers and online.  Many of the habitual Saturday morning garage patrons use the paper to plan their morning.  They do this to make sure they hit all of the sales in certain neighborhoods.  In the ad, mention your  Brooklyn home address, date and time of your garage sale and big or hot items you have for sale. 

·        Open early.  It’s best to open early, around seven in the morning.  Sales tend to taper off in the afternoon.  Don’t disappoint early shoppers who are typically your best buyers.  They have a busy schedule and a lot of sales to hit.  Open on time, or even a few minutes before the time you advertised.

·        Make plenty of signs pointing the way to your Brooklyn home.  If your yard is difficult to see, or is not on a main road, post signs pointing the way.  If allowed, post the signs near a main road and attach a few balloons to it.  This will catch the attention of the passing motorists.

·        Have everything clearly labeled with reasonable prices.  Keep in mind that these shoppers are looking for a bargain and price accordingly.  You can individually label each item, or use an easily readable color-coded chart.  For instance, a blue sticker means 25 cents, red stickers mean 50 cents, yellow stickers mean $1, etc.

·        Offer specials at different points during the sale.  You can offer a “two-for-the-price-of-one sale” hour or a “twenty percent off during the next hour” special.  Make sure to list your planned specials and their times at the bottom of your signs and newspaper ads.  At the end of the day, you may want to have an unadvertised special such as “fill a bag for $1” to get rid of as much as possible.

·        Donate leftovers.  Make your life easier and do something good for others by donating any items that don’t sell.  If you plan carefully, you can schedule a pick up by your local charitable organization at the end of your garage sale.

With these tips, you’re well on your way to having your best garage sale ever.

Want more money saving ideas like this one?  Subscribe Brooklyn Real Estate Blog get home improvement tips ?

Give me a calll Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate a call at (718) 253-9600 ext 206 or email me at [email protected].

Consumer Red Flags When Hiring Your Brooklyn Real Estate Agent

Sunday, February 10th, 2013

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Consumer Tip – Real Estate Red Flags (1)

The majority of Brooklyn licensed real estate agents and brokers are well-trained professionals who can help make the process of buying or selling your home a successful venture rather than a stressful adventure. Occasionally, however, you may run into an unlicensed person posing as an agent, or a licensed agent who is not following the rules of the profession. In either case, your real estate experience can quickly turn sour. Here are a few Consumer Red Flags When Hiring Your Brooklyn Real Estate Agent I hope you find them helpful for your next real estate transaction.

Following are some “red flags” that may assist you in determining if you are NOT working with a legitimate or honest real estate agent. These tips are not intended to provide legal advice in drafting real estate related documents or provide detailed descriptions of the nature of relationships that may be created between agents and buyers and sellers.

Consumer Tip – Real Estate Red Flags (2)

Some “red flags” that may assist you in determining if you are NOT working with a legitimate or honest real estate agent. These tips are not intended to provide legal advice in drafting real estate related documents or provide detailed descriptions of the nature of relationships that may be created between agents and buyers and sellers.

  • RED FLAG – Agents using high-pressure tactics, especially in an attempt to have you sign a purchase or listing agreement
    Tips-

    • Do not be pressured into entering into a purchase agreement based solely on the agent telling you there are multiple offers so you need to make your purchase agreement offer immediately. Multiple offers may exist but don’t be pressured into making a decision you are not comfortable with or if you do not understand the terms of the purchase agreement. If the sellers accept your purchase offer it becomes a legally binding contract. You may have to forfeit your earnest money deposit if you get “cold feet” and later decide that you just don’t want or like the property.
    • Do not be pressured into signing a listing agreement unless you are comfortable with the agent and understand and agree with the terms of the listing agreement including any marketing strategy.
  • RED FLAG – Agents asking for earnest money or a down payment check made out to the agent…or asking for cash
    Tips-

    • Earnest money should be paid with a check or money order and made payable to the real estate company and not to the individual agent.
    • By law, earnest money must be placed in the listing company “trust account” and cannot be mixed with personal funds of the agent. Once the listing company receives the earnest money, it must be deposited within three business days. However, the buyer and seller may agree, in writing, to handle the funds differently.
  • RED FLAG Agents who do not provide answers to your questions about the property or fail to return your calls or maintain communication with you
    Tips-

    • By law agents are required to disclose all material facts they are aware of that may adversely and significantly affect your use or enjoyment of the property, such as existing structural or mechanical problems, water infiltration problems, easements or encroachments, or faulty septic systems.
    • Do not enter into a purchase agreement until your questions are answered. You also have the option of including “conditions” or “contingencies” in your purchase agreement. If your conditions or contingencies were not met, you would not be obligated to go through with the purchase. Some common contingencies are a buyer requiring a satisfactory home inspection report by a certain date and at the buyer’s expense. If the home inspection is unsatisfactory, the buyer can cancel the purchase agreement and obtain a refund of the earnest money.
  • RED FLAG Agents who don’t disclose who they represent
    Tips

    • Whether you are buying or selling, it is important to understand the different types of relationships that can be created between you and an agent. Expect agents to act in the best interests of whomever they represent.
    • Agents must provide a consumer with an “agency disclosure” form at the first substantive contact with the consumer. The agency disclosure is intended to provide a description of available options for agency and nonagency relationships and a description of the role of a licensee under each option. The agency disclosure form is not a contract. If a buyer or seller wants an agent to represent them, a written contract must be entered into such as a listing agreement or a buyer representation contract. Following are the different types of agency relationships in real estate transactions:

    Seller’s Broker: A broker who lists a property of a salesperson who is licensed to the listing broker who represents the seller and acts on behalf of the seller.
    Subagent: A broker or salesperson who is working with a buyer but represents the seller. In this case the buyer is only the agent’s customer and is not represented by that agent.
    Buyer’s Broker: A buyer may enter into an agreement for the broker or salesperson to represent and act on behalf of the buyer. In this case, the agent represents the buyer only and not the seller.
    Dual Agency: Dual agency occurs when one broker or salesperson represents both buyer and seller, or when two salespersons licensed to the same broker each represent a party to the transaction. Dual agency requires the informed consent of all parties.
    Facilitator: A broker or salesperson who performs services for a buyer, a seller, or both but does not represent either in a fiduciary capacity – meaning the facilitator is not obligated to represent the best interest of either party.

  • RED FLAG – Agents who will only show you properties they have listed
    Tips-

    • A Brooklyn real estate agent who you have entered into an agreement with should be acting in your best interest, not his or her own best interests. Agents should be willing to show you properties that they have listed as well as other company listed property and property that is For Sale By Owner (FSBO’s).
  • RED FLAGAgents who ask you to sign blank or incomplete documents
    Tips-

    • Do not sign any real estate related documents that are blank or incomplete. Most of these documents are legally binding.
    • Be wary if you are told, “Don’t worry about that section, we’ll fill it in later.”
  • RED FLAG Agents who require a listing agreement for extended periods of time
    Tips-

    • Do not be pressured into signing a listing agreement for lengthy periods of time. A typical listing period is six months but you can negotiate a shorter or longer listing period.
  • RED FLAGAgents who are difficult to contact or do not regularly communicate with the consumer
    Tips-

    • An agent who has your best interests in mind should be easy to reach.
  • RED FLAGAgents who do not provide a basis for a listing price
    Tips-

    • The agent should provide a market analysis with documentation to support the listing price.
  • RED FLAG Agents who attempt to talk you out of a home inspection or hiring a real estate attorney
    Tips-

    • Agents are prohibited from discouraging the use of an attorney. Hiring an attorney, while not required, may be desired and it’s your right to do so.
    • If an inspection is discouraged, it might be because there is a defect in the property.
  • Make sure your agent is licensed
    Tips-

  • Tip-
    If you’re thinking about selling your Brooklyn real estate and would like more tips on how to get it ready, please call Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate a call at 718/253-9600 ext 206 or email me at [email protected], for more information and a Free Market Price Evaluation without obligation!

Considering Selling Your Brooklyn Home? Get the Scoop on the 3.8 Percent Real Estate Tax in the Healthcare Bill

Monday, September 17th, 2012

If you’re considering selling your Brooklyn home, you may have heard rumors that there is a new tax going into effect in January, 2013. Here’s the rundown on what the tax really is – and isn’t.

The new tax is called the ‘‘Unearned Income Medicare Contribution.” It is a 3.8 percent tax on the net investment income of high-income taxpayers. The tax will apply to those with an adjusted gross income of more than $200,000 ($250,000 for joint filers), with no indexing for inflation.

The Good News

Odds are that you will never pay this tax.

Why You Most Likely Won’t Pay the New Tax

The tax will apply to capital gains, not sale proceeds. Because of the current exclusion of gains on home sales — up to $500,000 (joint) or $250,000 (single) on a primary residence — the vast majority of home sellers will not be required to pay this tax.

 Here’s an example: A couple with an adjusted gross income of more than $250,000 (which qualifies them for the tax — more than 90% of households make less than that) decide to sell their house. They purchased their Brooklyn home long, long ago for $50,000. They sell the house, miraculously, for $549,000. Because that profit of $499,000 is under the $500,000 profit exclusion amount allowed for couples, they owe no tax.

The Bottom Line

There are plenty of other taxes that are worth getting upset about; this isn’t one of them.

If you’re Considering Selling Your Brooklyn Home on selling a Brooklyn home, I can help. Give me a call Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate a call at 718/253-9600 ext 206 or email me at [email protected].