Scottsdale AZ Real Estate | Bill Duffey | REMAX | Carefree, Cave Creek, Paradise Valley and North Phoenix - Homes, Land and Commercial PropertiesRE/MAX Excalibur REALTOR®Bill Duffey, Scottsdale AZ |
| See Capital Gains (below) PROPERTY TAXES Scottsdale Taxes per year = estimate>about 1% of *Assessed Value* (NOT Market Value) Explained below! The following examples show the applicable assessment ratios and computation of taxes for residential and commercial property owners: The Assessed Value divided by 100, times the tax rate. Click here for a full description>> http://www.maricopa.gov/Assessor/FaqAll.aspx#PropertyTax <<how are taxes calculated.
Maricopa County Assessor: http://www.maricopa.gov/Assessor/
Tax Break for Sellers Could Provide ReliefSept. 5, 2002 -- Some home sellers who may be concerned they owe capital-gains taxes are about to get good news from the Treasury. Treasury and IRS officials are expected to issue an interpretation of a 1997 law that will increase the number of people who can avoid owing capital-gains taxes when they own a home for less than two years and sell it for a profit. The decision will be especially good news for people who sold because of such unforeseen circumstances as the death of a spouse or the Sept. 11 terrorist attacks. That 1997 law eliminated capital-gains taxes for most people who sold their primary residence after having owned it for at least two years. This new twist will benefit many people who can't pass the two-year test. Here is a refresher course on that law and the basics of the important new rules likely to be issued soon, possibly this week: If you're single and you sell your home, you generally can exclude a gain of as much as $250,000. If you are married and filing jointly, you can exclude a gain of as much as $500,000. But to be eligible for the full exclusion, you must have owned your home and lived in it as your primary residence for at least two of the five years prior to the sale. Even if you sell before two years, you may be able to reduce or eliminate capital-gains taxes on your profit under certain circumstances. The law lists three. The first two are health reasons or a change in your place of employment. The third: "unforeseen circumstances." Alas, the law didn't bother defining what those are, and the IRS has said you can't cite "unforeseen circumstances" as a reason until final regulations are issued spelling out what they are. Treasury officials have received comments from the public saying the final regulations should include the death of a taxpayer's spouse, "man-made disasters" and acts of war, among other things, as "unforeseen circumstances." Officials say all of these items will be included in the final regulations. Divorce is also widely expected to be on the list. The final regulations also will provide the IRS commissioner with the discretion to decide that other circumstances may qualify as unforeseen circumstances. Taxpayers affected by the Sept. 11 terrorist attacks can cite those as an example of unforeseen circumstances, officials say. This includes not only the taxpayer but also that person's spouse, a co-owner of the home or someone "whose principal place of abode is in the same household as the taxpayer." A notice to be issued soon will give additional details. Here is an example of how to figure the exclusion for homeowners who can't meet the two-year test: Suppose you sold your home for health reasons after having owned it for exactly one year. In that case, take 50% of the maximum exclusion of $250,000 for most singles, or $500,000 for joint filers. IRS UPDATE on Capital Gains for Homeowners upon sale.
After nearly three years of uncertainty, the IRS has now delivered the answers to questions that have bedeviled home sellers, Realtors and professional tax advisers. In year-end regulations, the IRS clarified its rules on capital gains exclusions for profits on home sales. The largest category of people affected are those who sell their homes prior to the standard two-year holding period required for the maximum capital gains exclusions of $250,000 (single filers) and $500,000 (married, joint filers). The standard rules allow sellers to exclude up to those maximum amounts of sale profits provided they have owned and used their property as a principal residence for an aggregate two out of the five years preceding the sale. Any profits beyond the exclusion amounts are taxed at capital gains rates. For taxpayers who sell after ownership and use of less than two years, Congress created a partial exclusion or shelter back in 1997-1998: You can claim a portion of the maximum exclusion if you sell early because of a change in employment, a change in health, or because of “unforeseen circumstances.” For example, a single homeowner who sold his property for a profit after just one year because of a corporate transfer could claim one half of the full $250,000 standard exclusion--$125,000. In the absence of formal regulatory guidance from the IRS interpreting employment change, health change and “unforeseen circumstances,” many taxpayers have been reluctant to use the partial exclusion. The IRS itself warned taxpayers not to claim “unforeseen circumstances” on their returns until the agency itself spelled out precisely what circumstances qualify. Now the IRS has done so with interim rules, opening the door to partial exclusion claims for tax year 2002 and any prior year’s returns where a refund may be available under the new rules. (For such situations, taxpayers can file for refunds using Form 1040X.) On “unforeseen circumstances,” the IRS lists seven major categories that create a “safe harbor” that automatically makes the claim eligible:
The regulations also give the IRS commissioner the discretion to determine other circumstances that qualify as unforeseen. On employment changes that trigger early sales, the IRS rule is straightforward: “A home sale will be considered related to a chain in employment if a qualified person’s new place of work is at least 50 miles farther from the old home than the old workplace was from that home. This is the same distance rule that applies for the moving expense deduction. The employment change must occur during the taxpayer’s ownership and use of the home as a residence. The new rules allow a partial exclusion for health if “the primary reason is related to a disease, illness or injury” of the home seller or member of the household. If a physician recommends a change in residence for health reasons, that will be sufficient to claim the exclusion. Published: December 30, 2002 School Taxes
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