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Eileen M. Day i
CAPITAL GAINS
TIME CHANGE
The latest tax law (1984 Tax Reform Act) changed the time period for holding property for the purpose of capital gains to six months - a reduction from the previous one year holding period. In general, this is not such a vital change to real estate investors because the average investors hold their properties for about seven years. However, there are a few instances where this lowered time frame could be significant.
If you are a wizard at spotting good turnaround situations, you could turn your profit over twice as fast as before. Say you bought a property that was poorly managed and needing repairs and upgrading. If you made die quick improvements and upgraded the rental management, you could now resell the property in only six months (half the previous time period) to obtain capital gains treatment for your profits. The maximum rate on capital gains is only 20% and probably less for most people.
If there is anything we can do to help you in the field of real estate, please phone or drop in at EILEEN M. DAY, Realtor, The Clopton House, Washington, VA 22747. Phone: 675-3400. We’re here to help.
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