Selling Your Rental Property? Beware of Capital Gain Taxes

DuPage County real estate lawyersRental property can increase your bottom line, bulk your investment portfolio, and even fund your retirement. Unfortunately, it can also come back to haunt you. Capital tax gains, which are charged by the Internal Revenue Service (IRS), are applied to any asset that you sell for a profit. Learn how to mitigate against this issue with help from the following information.

Offset Gains with Expenditures

If you have an investment portfolio, you can attempt to offset some of the gain from your rental home with expenditures in other investment areas. Alternatively, you may have expenses related to the home itself, which may also be used to cut your tax load. The strategy, known as tax loss harvesting, should be used only under the advisement of a professional.

Use Section 1031 of the Tax Code

Investors who are simply searching for a new property or investment, and not a cash payout, may lower their tax load under Section 1031 of the IRS Tax Code. It does have to include a like-kind investment, but that does not mean you are required to swap out a house for a house. Instead, you can sell a house and trade it out for a condominium or a store. Just make sure the property is not going to be used as your own because that does not count under the exchange rule.

Turn Your Investment into a Home

Selling an investment property and a home you live in are treated as two completely different tax events by the IRS, which is why some investors turn their rental into a primary residence before they sell. Just keep in mind that you must own the home at least five years and live in it as a primary residence for at least two years before you can claim it as your own. Also, because there are some provisions on the deductions you can take, it is encouraged that you speak with a real estate lawyer before making the final decision to live in your rental.

Contact Our DuPage County Real Estate Lawyers

Whether you are planning on buying, selling, or renting a property, contact Stock, Carlson & Duff LLC. Dedicated and experienced, our DuPage County real estate lawyers protect your interests and investments. In every situation, we pursue the most favorable outcome. Schedule a personalized consultation to learn more about how we can help with your next real estate transaction. Call 630-665-2500 today.

Source:

http://www.investopedia.com/articles/personal-finance/121415/how-prevent-tax-hit-when-selling-rental-property.asp?lgl=myfinance-layout-no-ads

Violating a Tenant's Rights Can Result in Expensive Litigation

DuPage County real estate lawyersWhen it comes to renting out a commercial building or residential property, landlords assume a lot of risk. Tenants may fail to pay their rent, could cause destruction to the property, or may violate building codes and cause the landlord to incur extra expenses. Yet, even in such instances, landlords must adhere to certain laws. In particular, they must follow the due process to ensure a tenant's rights are not violated. Failure to do so can result in expensive litigation. The following explains further, and provides you with some information on how you can legally protect your commercial or residential rental property.

Landlord Faces Litigation After Locking Tenant Out of Restaurant

After allegedly being locked out of his restaurant, a Mount Prospect business owner is suing his landlord. He claims he had not been late on his rent, had not been any form of notification, and was not permitted to retrieve his property within the building. The landlord's attorney alleges, instead, that he is not in the wrong. If anything, he is allegedly allowing the tenant to walk away from a 10-year lease without having to pay for any damages that may be owed.

This case, though still unresolved, brings a serious issue to light. The tenant is essentially suggesting that they landlord did not follow the legal process for evicting a tenant. It is also not an uncommon issue, which is rather unfortunate since, in such a situation, the landlord could be held liable for any losses experienced by the business owner. This may include the loss of property, revenue, and possibly even the loss of a company.

Protecting Your Property the Legal Way

Landlords do not have to stand idly by as a tenant fails to pay rent, damages property, or otherwise fails to adhere to a contract. Instead, they can take legal action to enforce their contract. If those efforts fail, then the landlord may proceed with the eviction process. Be aware, however, that there are still risks involved. As such, you should contact an experienced attorney for assistance with the process – especially if you believe an eviction may be in order.

Contact Our DuPage County Real Estate Lawyers

If you need help with a tenant issue or eviction, contact Stock, Carlson & Duff LLC for assistance. Skilled and experienced, we will fight to protect your property and your interests. Schedule a personalized consultation with our DuPage County real estate lawyers to discuss your commercial or real estate property issue. Call us at 630-665-2500 today.

Sources:

http://www.dailyherald.com/article/20161216/business/161219180/

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2201&ChapterID=62