Capital Gains Tax Archives | Real estate and homes for sale in the South Bay

Information for First Time Home Buyers

When you’re thinking about buying your first home, it’s essential for you to be confident in your decision to buy instead of rent. However, you may not know about the many great reasons to buy a home! Here are just a few of them:

Smart Investment
When you invest in a home, it offers the possibility for appreciation in value. The equity becomes yours when you’re still paying off your mortgage. You even get to live in it while your investment matures.

Tax Advantages
Since both mortgage interest and property taxes are tax deductible, homeownership can save you significant amounts of money every year.

Planned Housing Costs
You decide how much you spend on your home, including repairs and improvements. Unlike renters, homeowners with a fixed-rate loan can lock in their monthly housing costs.

Improvements to Your Taste
You can choose which improvements to make your own property, such as a deck, kitchen remodel, or new paint, instead of needing permission from your landlord.

If you have more questions about making the decision to buy a home, please feel free to call or email. Back to the first time buyers tips and information page

We hope that the follwing information is helpful in giving you an idea of how tax laws have recently changed.

	PREVIOUS LAW	2018 LAW

MORTGAGE INTEREST DEDUCTION	Capped at $1M	Capped at $750,000

STATE AND LOCAL TAX DEDUCTION	Unlimited	Deduction capped at $10,000 (income, sales and property combined)

CAPITAL GAINS EXEMPTION ON SALE OF PRIMARY RESIDENCE	Exclusion of up to $250,000 ($500,000 if married) of gain realized on sale or exchange of principal residence if lived in for 2 of the last 5 years	No change

1031 LIKE-KIND EXCHANGES	Applied to all classes of property (e.g. personal and real)	Limits non-recognition of gain to real property

PERSONAL DEDUCTION	Allowed	Eliminated

STANDARD DEDUCTION	$6,350 individual and $12,7000 if married	$12,000 individual and $24,000 if married

MID FOR SECOND HOMES		Capped at $750,000

HOME EQUITY LOAN DEDUCTION	Capped at $100,000	Not deductible unless the proceeds are used to substantially improve the property

MOVING EXPENSE EXCLUSION AND DEDUCTION	Incurred in connection with change in work place	Eliminated except for members of armed forces on active duty that move pursuant to military orders

CHILD TAX CREDIT	$1,000 for each child	$2,000 for each child

DEDUCTION FOR QUALIFIED BUSINESS INCOME OF PASS-THROUGH ENTITIES INCLUDING INDEPENDENT CONTRACTORS	None	20% deduction of taxable income phased out above $157,000 ($315,000 if married) for brokerage services

DEPRECIATION RECOVER PERIOD FOR REAL PROPERTY (RESIDENTIAL RENTAL)	Recover period is 27.5 years	No change

DEPRECIATION RECOVER PERIOD FOR REAL PROPERTY (NONRESIDENTIAL)	Recover period is 39 years	No change

DEPRECIATION RECOVER PERIOD FOR REAL PROPERTY (LEASEHOLD IMPROVEMENTS)	Recover period is 15 years	No change

Manhattan Beach	Hermosa Beach	North Redondo	South Redondo	El Segundo
Torrance	Palos Verdes Estates	Rancho Palos Verdes	Hollywood Riviera	Hollyglen
Lawndale	Hawthorne	Gardena	Manhattan Village	Rolling Hills Estates
MB Sand Section	MB Tree Section	MB Hill Section	East Manhattan	Oceanfront Homes

Why Buy a Home Instead of Rent?

Information for First Time Home Buyers

2018 Tax Law Changes in California