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Be Mindful of These Expiring Tax Cuts

Posted by & filed under Taxes and How to Protect Yourself.


On December 31, 2012, if Congress does not take action before then, the following changes to our tax system will go into place. Meet with an attorney today to discuss your options and how to protect yourself in 2012 before the year is over.

1. The maximum federal income tax rate on most 2013 long-term capital gains from real property sales is scheduled rise from the current 15% to 20%.

2. The top rate on most long-term gains from selling properties acquired after December 31, 2000 and held for more than five years is scheduled to rise from the current 15% to 18%.
3. If you sell a rental property for a gain in 2013, a 25 percent maximum rate will apply to the gain amount attributable to the cumulative depreciation write-offs you’ve taken on the property. The same 25 percent rate also applies to depreciation-caused gains from 2012 sales. (Depreciation can cause a taxable gain even if you sell a rental property for somewhat less than the amount you invested — because your basis in the property for tax gain/loss purposes is reduced by depreciation deductions.)
4. The maximum rate on 2013 short-term gains from real property sales will rise from 35 to 39.6 percent.
5. The maximum rate on net ordinary income from operating rental properties (when rental income exceeds your tax write-offs, including depreciation) will rise from 35 to 39.6 percent.

Do not wait to prepare for these changes. Meet with your professional team of attorneys and CPAs to discuss how this affects your family today.

Call our office today at 702-800-6525 to help you get past this treacherous tax hurdle.