{"id":13132,"date":"2020-02-26T00:25:51","date_gmt":"2020-02-26T07:25:51","guid":{"rendered":"https:\/\/woodriverweekly.com\/?p=13132"},"modified":"2020-02-26T00:25:51","modified_gmt":"2020-02-26T07:25:51","slug":"what-kind-of-properties-are-these","status":"publish","type":"post","link":"https:\/\/woodriverweekly.com\/index.php\/2020\/02\/26\/what-kind-of-properties-are-these\/","title":{"rendered":"What Kind Of Properties Are These?\u00a0"},"content":{"rendered":"
\"\"
Anna Mathieu
Realtor\u00ae, Associate Broker, GRI, MBA
This Year\u2019s Winner of the Windermere Cup for Outstanding Performance
Windermere Real Estate\/SV, LLC
(208) 309-1329
AnnaMathieu@Windermere.com
5b-realestate.com
To subscribe to the Better Homeowners newsletter:
tinyurl.com\/y8koftym<\/figcaption><\/figure>\n

It is the way the property is used that determines the type of property it is, not what it looks like.\u00a0Based on the intent of the owner, the property could be a principal residence, income property, investment property or dealer property.<\/p>\n

A principal residence is a home that a person lives in.\u00a0There can be only one declared principal residence.\u00a0It is afforded certain benefits like deducting the interest and property taxes on a taxpayer\u2019s itemized deductions, up to limits.\u00a0Up to $250,000 of gain for a single taxpayer and up to $500,000 for a married couple filing jointly can be excluded from income if the property is owned and used as a principal residence for two out of the previous five years. And the Home Owner\u2019s Exemption of up to $100,000 from the assessed value (you must file for the HOE with the assessor\u2019s office before April 15th).<\/p>\n

An income property is an improved property that is rented for more than 12 months.\u00a0The improvements can be depreciated based on a 27.5-year life for residential property or 39 years for commercial property.\u00a0This is a non-cash deduction that shelters income.\u00a0When the property is sold, the cost recovery is recaptured at a 25 percent tax rate.<\/p>\n

An investment property could be an improved property or vacant land that does not produce income and is not eligible for depreciation or cost recovery.\u00a0The gain on both income and investment properties are taxed at a lower, long-term capital gain rate and are eligible for a tax-deferred exchange.<\/p>\n

Second homes are properties that a taxpayer primarily uses for personal enjoyment but is not their principal residence.\u00a0For IRS purposes, it is treated as an investment property in that the gain is taxed at preferential long-term rates if it is held for more than 12 months.\u00a0However, it is not eligible for exchanges because personal-use properties are excluded from that benefit.<\/p>\n

Properties that are built or bought to make a profit are considered inventory and are labeled dealer properties.\u00a0The gain is taxed at ordinary income rates and they are not eligible for section 1031 deferred exchanges. The financing available differs considerably based on the intent of the owner, which determines the type of property.\u00a0Owner-occupied homes, used as a principal residence, are eligible for low down payment mortgages like VA, FHA, USDA and conventional ranging from nothing down to 20 percent.<\/p>\n

A second home, in most cases, requires a minimum of 10 percent down payment.\u00a0Investment and income properties, generally, require 20 percent or more in down payment with some possible exceptions.\u00a0There is not any long-term financing available for dealer property.<\/p>\n","protected":false},"excerpt":{"rendered":"

It is the way the property is used that determines the type of property it is, not what it looks like.\u00a0Based on the intent of the owner, the property could be a principal residence, income property, investment property or dealer property. A principal residence is a home that a person lives in.\u00a0There can be only […]<\/p>\n","protected":false},"author":1,"featured_media":13133,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","_pvb_checkbox_block_on_post":false,"footnotes":""},"categories":[64,38],"tags":[],"class_list":["post-13132","post","type-post","status-publish","format-standard","has-post-thumbnail","category-better-homeowners-news","category-sponsored"],"_links":{"self":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts\/13132","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/comments?post=13132"}],"version-history":[{"count":0,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts\/13132\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/media\/13133"}],"wp:attachment":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/media?parent=13132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/categories?post=13132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/tags?post=13132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}