By Ivette Carrasco, CPA, Tax Manager
ASL Real Estate Group
There are different tax treatments to consider when selling your real estate property. The property can be classified as a primary residence, a real estate rental, an investment property, or a second home/vacation rental. The applicable tax consequences on the sale of a property depends on how the asset was classified in the current and prior tax years. It is important for real estate owners to be aware of the various tax implications that a real estate sale can trigger. (more…)
By Samantha Ramirez, CPA, Tax Manager
ASL Real Estate Group
A like-kind exchange, commonly referred to as a “1031 exchange”, allows for the deferral of gains from the sale or exchange of business or investment property, as long as the exchanged properties are considered like-kind. Any money or property received that is not like-kind is ineligible for gain deferral and is considered a taxable event. After the 2017 Tax Cuts and Jobs Act (TCJA), the classification of like-kind was limited to include only real property. With the new, narrower definition of like-kind, the IRS issued proposed regulations in June 2020 that defined real property for the first time for purposes of Internal Revenue Code Section 1031. Recently, the IRS issued final regulations that adopted most of these proposed regulations, with some notable changes and clarifications. Below is a summary of the most recent changes. (more…)
By Anu Joshi, CPA, Senior Tax Manager
ASL Family Wealth & Individual Tax Group
California Proposition 19 – Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Amendment (2020) – was approved on November 3, 2020, with a slim margin of 51.1% of voters supporting it. The proposition eliminates two provisions of Proposition 13 that were very beneficial to property owners. The effective date of the changes made by Proposition 19 are:
- For Base-Year Value Transfers – April 1, 2021, and later
- For Parent to Child Transfers and Grandparent to Grandchild Transfers – February 16, 2021, and later
What do these changes mean for property owners? (more…)
By Abe Livchitz, CPA, Senior Tax Manager & Jimmie Machlan, CPA, Tax Manager
ASL Real Estate Group
This November, voters will be deciding many national and state issues. Californians will be asked to make important decisions on measures impacting commercial property owners and residential homeowners. California Proposition 15, also called the “split roll tax” would require commercial and industrial properties to be taxed on current market value. California Proposition 19 would change certain property tax exemptions and transfer rules. If either proposition passes, the changes will not only impact how property tax is calculated but also result in significant tax increases for many property owners. The State Legislative Analyst estimates that in 2025 property tax revenues could be $8 to $12 billion higher if Proposition 15 is enacted. (Official Voter Information Guide – Prop 15) (more…)
By Rachel Gillespie, CPA, Principal
ASL Real Estate Group
The Coronavirus Aid, Relief and Economic Security (CARES) Act created several new funding options and tax opportunities for Bay Area businesses. This includes the Paycheck Protection Program, changes to Economic Injury Disaster Loans (EIDL), and the introduction of payroll tax credits for qualifying paid sick leave and for employee retention efforts. The central focus of the changes was to provide immediate cash flow opportunities through low-interest loans, payroll tax credits, and other incentives. While these provisions in the CARES Act often receive the most attention, there was another change that can provide immediate cash flow benefits to both landlords and tenants. Through a technical correction provided in the CARES Act, Qualified Improvement Property (QIP) placed into service in 2018 or later, is now considered 15-year property and eligible for 100% bonus depreciation. This technical correction opens the door to new saving opportunities for qualifying taxpayers. (more…)
By Abe Livchitz, CPA, Senior Tax Manager
For many years San Jose required residential landlords with rentals within the city to pay an annual Business (License) Tax. A license was required if the landlord owned three or more residential rentals. In March, 2016 voters passed Measure G which “modernized” the city’s Business License rules effective July 1, 2017. The exception for property owners holding one or two residential rental properties was eliminated. As a result all taxpayer’s owning residential rental property within San Jose must register for and pay the $195 San Jose Business License Tax. Registration under measure G was required prior to September 30, 2017 but the City has extended the deadline until December 15th. The City will waive penalties and interest if property owners register and pay their Business License Tax prior to December 15th. Registration and payment can be made on-line at:
http://www.sanjoseca.gov/index.aspx?NID=5599
Measure G also increased the tax rates and maximum tax imposed on commercial landlords and mobile home park owners.
