Today TaxMama hears from Marti in the Tax Parlor, who tells us , “I recently got married and we are trying to figure out the best ways to save money on taxes. We sold a property and plan to use the criteria for paying no capital gains on it. We own another property together and a rental too. Should we file separately but married or together? What can we do to not get killed paying taxes?”
Congratulations on your recent marriage. I hope you remain each other’s best friends forever.
Looks like you each came to the marriage with a stable financial situation. So, that’s a great starting point.
When it comes to rental income and losses, there are no tax advantages to filing separately. In fact, there are disadvantages.
What you need to do is to sit down with a good local tax professional who understands real estate taxation, and who is clever, charismatic and engaging. Describe your long-term plans and work out the best long-term tax plan to match.
Incidentally, if you do want to keep all your real estate sales tax free, just move into each property for 2 years before you sell it. You’ll be able to keep $500,000 worth of gains untaxed on each property. It may be worth two years in a less-than perfect house for that kind of profit.
And remember, you’ll find answers to lots of questions about married taxation and other tax information, free. Where? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips. Please click on the subscribe link and join us.]
To make your comments, please visit TaxMama’s Parlor at TaxTwist.com.
- Ask TaxMama :: Where taxes are fun and answers are free
- TaxTwist.com :: Where TaxQuips will be moving & You can add your comments