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Month: July 2022

Is Giving a Gift or Inheritance of Property, Taxable?

Citizens and residents of the USA are subject to federal taxation on income derived from any source, this includes compensation for services, business and investment income, gains from the sale of property, and income received from an interest in an estate or trust [1]. However, there is an exclusion from gross income for “the value of property acquired by gift, bequest, devise, or inheritance,” but that exclusion does not extend to “the income from” the property per §102 of the Internal Revenue Code (I.R.C.) [2]. This means that the beneficiary of a gift or bequest is not subject to income

Can You Afford a Home? How To Budget for a Purchase

With today’s crazy real estate market, inflation, and talks of recession it’s difficult to find an affordably priced home. How do you determine if you can “afford” a home? Factor in the worst-case scenario that could jeopardize making your 15 or 30 year mortgage payment. Say you have a $150k/year salary job as an employee and you’re single. You’re fairly confident in the near term you’ll be employed, but there’s a chance you could be laid off during a recession. Ask yourself, what’s your earning potential during a recession? $100K? $80K? $75K? Let’s say you believe it’s 100k, but worst

Should You Gift, or Finance Your Home to Your Children?

With today’s home prices and the crazy real estate market, it’s likely difficult for your children to buy a home. And it’s conceivable that you are ready to move on from your existing home. If this is true, consider the three options below. Option 1: Make an Outright Gift Say you’re feeling so generous that you might just simply give your home to your adult child. What a deal for the kid! Tax-wise, if you make the gift this year, it will reduce your $12.06 million unified federal gift and estate tax exemption. To calculate the impact, reduce the fair

Self-Directed IRA’s for Real Estate: Good or Bad?

The stock market is tanking while real estate continues to skyrocket. If your retirement savings have taken a hit, you may be wondering if this is the time to invest in real estate through your IRA, Roth IRA, or SEP-IRA. You can’t invest in real estate with a traditional IRA or Roth IRA (or SEP-IRA) you establish with a bank, brokerage, or trust company. These types of IRA custodians typically limit you to a narrow range of investments, such as publicly traded stocks, bonds, mutual funds, ETFs, and CDs. But you can invest in real estate if you establish a