Understanding Capital Gains in Real Estate
Posted by Cary_Agent
When you sell a stock, you owe taxes on your gain—this is the difference between what you paid for the stock and what you sold it for. The same is true with selling a home (or a second home), but there are some special considerations.
How to Calculate Gain
In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis and you can calculate this by doing the following:
1. Take the purchase price of the home defined by the sale price, not the amount of money you actually contributed at closing.
2. Add any adjustments such as: 
Cost of the purchase which includes transfer fees, attorney fees, inspections, but not points you paid on your mortgage.
Cost of sale which includes inspections, attorney’s fee, real estate commission, and money you spent to fix up your home just prior to sale.
Cost of improvements which includes room additions, deck, etc. and not here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.
3. The total of this is the adjusted cost basis of your home.
4. Subtract this adjusted cost basis from the amount you sell your home for. This is your capital gain.
A Special Real Estate Exemption for Capital Gains
Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:
A) you have lived in the home as your principal residence for two out of the last five years.
B) You have not sold or exchanged another home during the two years preceding the sale.
Also note that as of 2003, you may also qualify for this exemption if you meet what the IRS calls “unforeseen circumstances” such as job loss, divorce, or family medical emergency.
Real Estate Investing10 Ways to Make Your Home Irresistible at an Open House
Posted by Cary_Agent
1. Add a touch of color by putting out fresh or silk flowers in the main rooms.
2. Replace the shower curtain, put out fresh towels and new guest soaps to every bath.
3. Make fresh baked goods or set out potpourri for a homey smell.
4. Have the table set with pretty dishes and candles.
5. Put out a fresh doormat with a clever saying.
6. To create a sense of spaciousness, take out one or two pieces of furniture in the main rooms.
7. Put away kitchen and personal bathroom appliances to give the illusion of more counter space.
8. Make a fire in the fireplace or put a basket of flowers there if it’s not in use.
9. Depersonalize your space by putting away family photos, mementos, and distinctive artwork.
10. Make your lawn sparkle by turning on the sprinklers for 30 minutes.
Seller Tips