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© OnCourse Learning Chapter 15 : Taxes and Assessments
appraisal & assessment ad valorem taxes = according to value source of income for local government tax district appraises all taxable property tax rate calculation PROPERTY TAXES © OnCourse Learning
Expressing Property Tax Rates Mill RateDollars per HundredThousand School district 40 mills$4.00$40.00 City303.0030.00 County101.0010.00 Total80 mills$8.00 $80.00 Dollars per © OnCourse Learning
85 mills =.085 215 mills = 2.15 5 mills =.005 Move decimal: Tax appraised value Assessed value Millage rate (e.g., 80 mills; see previous slide) Result: Tax Bill Calculations using Mills © OnCourse Learning
Unpaid property taxes Assessment appeal Property tax exemption Property tax variations Special assessments OTHER TAXING MATTERS © OnCourse Learning
Basis is the price originally paid for the home plus any fees paid for closing and improvements. FEDERAL INCOME TAX © 2010 by South-Western, Cengage Learning
To calculate the gain you must take the sale price and subtract the selling expenses; then subtract the basis to determine the gain. CAPITAL GAINS © OnCourse Learning
Purchase price $90,000; closing costs are $500 Basis $ 90,500 Add landscaping and fencing for $3,500Basis $ 94,000 Add bedroom and bathroom for $15,000 Basis $109,000 Sell home for $125,000; sales commissions Amount realized $117,000 and closing costs are $8,000 Amount realized $117,000 Less basis -$109,000 Equals gain $ 8,000 Calculation of Gain © OnCourse Learning
Sale of principal residence Used for 2 of the last 5 years Married – exclude up to $500,000 gain Single – exclude up to $250,000 gain INCOME TAX EXCLUSION © OnCourse Learning
15% to 20% If property held longer than 1 year CAPITAL GAINS TAX RATE © OnCourse Learning
Selling price of old home Less selling expenses Less fix-up costs Equals adjusted sales price $250,000 -18,000 -7,000 $225,000 Adjusted Sales Price © OnCourse Learning
INSTALLMENT METHOD Sale of real estate in which the proceeds of the sale are deferred beyond the year of sale
Tax Deductions State & local real estate taxes Interest with limits Other deductions © OnCourse Learning
Impact on Real Estate Agent’s Liability for Tax Advice Conveyance Taxes © OnCourse Learning TAX RULES FOR REAL ESTATE ARE CONTINUALLY CHANGING
Ad valorem taxes Adjusted basis Assessed value Assessment appeal board Basis Documentary tax Installment method Mill rate Tax certificate Tax lien Key Terms © OnCourse Learning
Business Math, Eighth Edition Cleaves/Hobbs © 2009 Pearson Education, Inc. Upper Saddle River, NJ All Rights Reserved 15.1 Mortgage Payments Find.
South-Western Publishing©2002 By Charles J. Jacobus Real Estate Principles Ninth Edition Real Estate: An Introduction to the Profession Ninth Edition South-Western.
REAL PROPERTY REASSESSMENT. This is the County’s sixth reassessment The 2013 property values for property tax purposes are as of December 31,
© 2011 Cengage Learning. Real Estate Taxation Issues Chapter 14 © 2011 Cengage Learning.
Taxes ©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in.
Unit 9 Seminar: Taxes Please have the tables handy.
Real Estate Investment Chapter 8 Single-Family Dwellings and Condominiums © 2011 Cengage Learning.
Income Tax Fundamentals 2010 Gerald E. Whittenburg & Martha Altus-Buller Student’s Copy 2010 Cengage Learning.
1 Taxable Income Here we study some details about how to calculate the income tax we actually owe.
Income Tax Fundamentals 2009 Gerald E. Whittenburg & Martha Altus-Buller Student’s Copy 2009 Cengage Learning.
Chapter 15 Taxes and Assessments. Review Gov’t Limitation of Private Ownership of Real Estate Taxation (Ad valorem and Income) Escheat Eminent domain.
CHAPTER SEVEN SINGLE FAMILY HOUSING: PRICING, INVESTMENTS, AND TAX INVESTMENTS.
Chapter 16 Federal Taxation and Real Estate Finance © OnCourse Learning.
© OnCourse Learning. All Rights Reserved. Federal Taxation of Home Ownership Learning Objectives Define and list examples of income tax deduction benefits.
Investment Income Tom Tosuksri, Cleveland Housing Network 1.
Business Math, Eighth Edition Cleaves/Hobbs © 2009 Pearson Education, Inc. Upper Saddle River, NJ All Rights Reserved 19.1 Sales Tax and Excise.
© 2009 by South-Western, Cengage Learning SAMIRLANDER Chapter 18.
Real Estate Investment Chapter 6 Property Taxes and Income Taxes © 2011 Cengage Learning.
Chapter 8 Capital Gains and Losses Income Tax Fundamentals 2011 Gerald E. Whittenburg & Martha Altus-Buller Student’s Copy 2011 Cengage Learning.
© 2015 OnCourse Learning Chapter 15 Federal Income Taxation and Basic Principles of Real Estate Investment.
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