When it comes time for you to sell your home, understanding everything you need to know about Tennessee taxes can often be difficult. Legally, there will be a lot of ground to cover, and if you miss some important steps, you could end up having a difficult time selling your home.
A real estate attorney will be able to help you navigate your state taxes and sell your home just when you need to do so. With the right legal guidance, you will be able to get the most out of your real estate property sale.
Here are some of the ways real estate attorneys handle home sale taxes in Tennessee:
- Understanding When Taxes are Due
- Capital Gains Taxes
- Understanding Property Taxes
- Tennessee Residential Real Estate Attorney
Understanding when taxes are due
when you decide to sell your residential property, making sure you understand your state taxes that are associated with real estate sale is important. In order to ensure a successful sale of your home, a real estate attorney can ensure that you are covering all of your bases. One of the first troubles homeowners run into when attempting to list their home has to do with when taxes are due. A critical part of the home sale process, any capital gains taxes that you owe because of the sale of your house will need to be paid at the tax deadline for the same year.
This essentially means that if you sell your home on February 10, 2021, you would then have to pay those taxes when you file your 2021 tax returns. These would then be due April 15, 2021. In some instances, there will be cases that require you to pay estimated tax payments beforehand. If this is the case for your home sale, you may want to go ahead and begin making estimated tax payments to avoid a larger tax bill in April.
Whichever decision you do make, a real estate attorney can ensure you follow the right regulations and procedures.
Capital Gains taxes
as the taxes vary with your property sale will likely vary from state to state, a real estate attorney can ensure you’re following the proper guidelines based on the state in which you live. In Tennessee, the capital gains tax focuses on the appreciation that eventually becomes your profit when you sell your home. To put it plainly, the difference between the price you paid for your home and the price you sold it for equals your capital gains. The capital gains tax rate that you will eventually have to pay will depend on your income. Rates for the capital gains tax varies between 0 to 15 and up to 20 percent.
For many people selling their home, federal tax law often allows for the first $250,000 in capital gains to go tax-free. However, any profits incurred over the amount of $250,000, will still be taxed. Based on your income and the listing price of your home, a real estate attorney will be able to help you determine the taxes you owe, if any.
To ensure you’re getting the best rates on your capital gains tax, connect with a local real estate attorney.
Understanding Property Taxes
A big reason home sale taxes can be so confusing is because many states don’t make it easy to figure out your property taxes in any given year. The state of Tennessee requires an effective real estate tax rate of 0.73%. However, your specific property taxes will depend on the evaluation of your property in combination with your local county tax rates.
With so many different types of taxes that vary based on your income level, your property evaluation and your specific state, keeping up with the rolling ball during your sale process can be unnecessarily tricky. A real estate attorney will be able to provide you with the right information on your property and your specific property taxes. However, be sure to also keep an eye on any recent changes in your specific state and local county government, as tax reform bills are always changing and being reworked.
Tennessee residential real estate attorney
Hiring an experienced real estate attorney like Rochford Law & Real Estate Title in Nashville, TN can save you time and money in the long run. It’s best to cover all your bases and get through a real estate transaction with as little problems as possible. However, it’s comforting to know that should a dispute pop up, a real estate litigation attorney can help find a resolution.