Tax Increase May Make 2010 A Better Year To Sell

July 27th, 2010 categories: The Market

Lost amidst the hubbub of health care reform and financial overhauls has been the fact that if the President and Congress don’t act, taxes rates will be going up. Ironically in the last week, the New Times and Wall Street Journal have both published articles concerning the looming battle.

“If no tax legislation is passed, all the major tax reductions passed under President George W. Bush in 2001 and 2003 will expire, with rates reverting overnight on Dec. 31. The top marginal income tax rate, for example, would go back to 39.6 percent from 35 percent now, with corresponding increases in rates for lower income brackets.” CLICK HERE TO READ THE ENTIRE NEW YORK TIMES ARTICLE

“Pressure is growing on the administration from a small number of Democratic lawmakers to extend all the Bush cuts, which include taxes on investment income and capital gains.” CLICK HERE TO READ THE ENTIRE WALL STREET JOURNAL ARTICLE

Given the majorities that the Democrats have in the house and senate, it is very possible that the Republicans will not have the votes to stop the automatic increase in taxes. If no extension of the current law is made the capital gains tax will raise from 15% to 20%. If you are thinking about selling a Honolulu house or condominium, by selling and closing in 2010 you should lock in the lower rate (providing the sneaky guys in DC don’t make a retroactive law). On a sale of $600,000, if the entire amount of the sale is capital gains, closing your sale in 2010 could save you $30,000!

Time is short! An average closing time is 45 days which means you would want have your property under contract by November 15^th, at the latest! If you would like to investigate getting sold this year, call me at 808-398-3220.

This entry was posted on Tuesday, July 27th, 2010 at 9:32 am and is filed under The Market. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.