How To Save On Capital Gains Taxes When Selling Your Red River or Angel Fire Home

If you're getting ready to sell your vacation home and you haven't separated the furniture from the real estate price, you're probably about to overpay on capital gains taxes. There's a simple fix, and it can keep real money in your pocket.

What Capital Gains Actually Taxes

Capital gains is a tax on assets that went up in value. Your home likely did. The furniture inside it did not. Beds, dishes, and couches have all been losing value since the day you bought them. Most sellers still roll everything into one closing number and pay capital gains on the whole thing, furniture included.

Sell the Furniture Separately

Here's how you fix it. Pull the furniture out of the sale and sell it separately to the same buyer. A nice furnished home up here in Red River or Angel Fire can easily carry fifty to a hundred thousand dollars in furnishings. When you sell that to the buyer as its own line, the amount comes off the real estate sale price, and your capital gains liability drops with it. This works because furniture is personal property, not real property, and the two get treated differently.

Loop In Your Accountant

There's some added documentation at closing, and you'll want your accountant in the loop before you do this. Done right, you're simply not paying capital gains on items that have already lost value. That's money back where it belongs.

Selling a vacation home is one of the bigger financial moves you'll make up here. A little planning on the furniture side keeps more of the sale in your hands.

You Might Also Find These Helpful

 

Have questions or want to learn more? Give us a call at 575-613-4243. We're happy to help.

Rob Swan | Qualifying Broker | Swan Realty Inc.

 

Google Preferred Source