4 Homes That Sold in the Nick of Time
La Jolla, Calif.
Location: La Jolla, Calif.
Sold for: $5.45 million
Estimated tax savings: $260,000
The sellers of this five-bedroom property decided to upgrade to a house on the beach one block away -- and they made sure to close the deal ahead of the Jan. 1 tax law changes, said agent Drew Nelson of Willis Allen Real Estate.
By raking in about $3 million in profit in 2012 instead of 2013, they saved more than $110,000 on the 3.8% Medicare surtax on investment gains and another $150,000 or so on the hike in the capital gains rate to 20% from 15%.
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Chevy Chase, Md.
Location: Chevy Chase, Md.
Sold for: $2.6 million
Estimated tax savings: $110,000
In this posh suburb of Washington D.C., the sellers of this eight-bedroom brick Georgian were hoping to unload their home before Jan. 1.
The house had gained $1.8 million in value since it was last sold in 2005, some of which was courtesy of a few hundred thousand dollars of work the sellers put into it. With the impending Medicare surtax on investment income and the potential hike in capital gains rate to 20% from 15%, the owners were facing a huge tax bill if they sold after Jan. 1.Luckily, they managed to close a deal in November, resulting in a tax bill that was about $110,000 cheaper than what they would have had to pay if they had sold this year.
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Location: Redding, Conn.
Sold for: $11.8 million
Estimated tax savings: $125,000
At the offices of Halstead Properties in Fairfield County, Conn., five out of the eight $7 million-plus sales of 2012 occurred during the last two months of the year -- and this home is one of them.
The surge in luxury sales was mainly sparked by the impending tax hikes, said Halstead agent Becky Munro.
The tax savings on this enormous 40-acre estate, which sold right before the end of 2012, was about $125,000.
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Location: Malibu, Calif.
Sold for: $4.2 million
Estimated tax savings: $200,000
Beach property in California is typically hard to come by. Nevertheless, this home sat on the market for more than a year before it finally sold.
Luckily for the owners, the deal on this big, modern home closed before New Years.
Even after updates and improvements, the sellers still turned a tidy profit. They bought the house for just $840,000 back in 1993. And by selling before Jan.1, they were able to save roughly $200,000 in capital gains taxes and the Medicare surtax.
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