Once you decide, “I need to sell my house fast in Georgia,” it is crucial to understand the tax implications. Selling a home for cash in Georgia can be a great move in terms of convenience and speed. But, like with most big decisions, it’s important to consider the tax implications that come with it. This blog outlines the taxes you will pay when trying to sell your house fast in Georgia.
Capital Gains Tax
Profits from selling an asset such as stocks, real estate, or a business are capital gains. These kinds of gains are usually regarded as taxable income. The amount of tax you owe on these gains can vary greatly depending on your income level and how long you owned the asset before selling it.
The sale of an asset held for one year or less is subject to a tax known as short-term capital gains tax. It is equal to your usual federal income tax rate.
The sale of an asset owned for more than a year may be subject to long-term capital gains tax. Here is a breakdown of the percentage you will pay:
|Long-Term Capital Gains Tax Rate||Your Income|
|0%||$0 to $39,375|
|15%||$39,376 to $434,550|
|20%||$434,551 or more|
Claim Deductions for Selling Costs
While selling your home, you can make reasonable deductions to reduce your tax burden. Some allowable deductions include mortgage interest, closing costs, and real estate taxes. You’ll need to ensure the deductions are justified, and the IRS will only accept legitimate expense claims.
Additionally, if you’re selling a primary residence, up to $250,000 in profit (or $500,000 for married couples) is exempt from the capital gains tax, depending on your filing status.
Selling with a 1031 Exchange
A 1031 exchange, also known as a like-kind exchange, is a real estate investing tool that allows investors to defer capital gains or losses when exchanging one investment property for another. By taking advantage of this tool, investors can swap out an asset for another without paying the capital gains tax that would otherwise be due at the time of sale.
Reduce Your Overall Selling Cost by Selling It for Cash
Selling a home for cash in Georgia may reduce your overall selling costs because you don’t have to pay commissions and fees to a real estate agent. Additionally, the cash home buyer generally takes care of closing costs, so you get to pocket more money and move on with your life. This way of selling your house can be particularly beneficial if you want to sell your home quickly.
Diamond Equity Investments is a leading cash home buyer in Georgia. We make a fair cash offer and can close in as little as 30 days! We buy houses in Georgia for cash, no matter the condition or location. Call us today to get an offer!