Month: September 2021

Here’s how to evict a tenant in CA.

Please understand that when you have to evict a tenant anywhere can come with a lot of hard work on your part as the landlord.

When dealing with rental houses, there are lots of potential issues that can arise. Things like tax implications, and evictions are common. Evicting a tenant can add stress to a landlord’s life.

It also will require you to understand the laws concerning evictions and tenants rights. Those that are new to rental property often have a tendency of forming a tenant friendship. When it comes time to learn how to kick a tenant out, it becomes a very stressful situation…especially if the tenants are relatives. Yikes!

How to Evict a Tenant Quickly in CA

Having to deal with evicting a tenant can often be avoided. This can be done through the proper pre-screening and choosing of tenants to begin with.

However, no matter how careful someone may be, circumstances can change. There can be a variety of reasons of why you may have to learn how to evict tenants.

What has to be realized is that your rental property is a business to you and you will have to conduct it as such. This means that you will have to know how to evict tenants when and if the situation arises.

How To Evict A Tenant Not Paying Rent

Often a landlord has to go through the eviction process because the tenant is not paying their rent.

Evicting a tenant not paying rent is not something that you should wait to learn about. If you do find yourself in that situation, you might consider selling the rental property with tenants still there.

As a landlord, you really want to learn what the rules are that pertain to the landlord and tenant act. You also want to learn the eviction laws. Knowing these makes it much easier when you have to kick a tenant out. These should be learned when first drawing up the lease agreement.

Eviction Laws

The eviction laws will differ from state to state.

Even if you are familiar with one state make sure that you know the laws for the state you are renting your house in. How to evict a tenant in CA will most likely be different than other states.

When it comes to evictions, it’s best not to do it on your own. It can become so frustrating that landlords start removing items from the tenant’s home. Or change the locks. Or they may shut off the critical essentials like the electric, gas and water. These may be all measures that would possibly get your tenant to vacate…but can be illegal.

You need to go through the proper legal recourse that is in place for you to evict your tenant.

When it comes time to go to court you want to show the courts that you have abided by all of the rules. You  should not have been vindictive in any way. This could cause the judge to show more leniency towards the tenants.

One of the reasons for trying to figure out how to evict a tenant in CA is because of failure to pay rent…obviously, if they don’t pay they shouldn’t stay.

Other Reasons to Evict a Tenant

They may have violated the lease agreement or they are causing damage to your property.

It could also be that they are a hindrance to your other tenants. This could be by causing noise disturbances or health issues.

Whatever the reason may be you have to ensure that you have the proof and that it is well documented. It could be you happened to learn that you are in a gray area of the law when it comes to how you approach your eviction of a tenant.

You may want to try and approach your tenant asking them to leave in a polite way. This may be done  without having to go through the entire legal process. In many cases this doesn’t usually work and you will need to learn how to start the eviction process.

How To Start The Eviction Process

Evicting a tenant in CA requires you to start the eviction process.

The first thing you’re going to want to do is give a formal notice of eviction. This is after you have definitely determined that you have the grounds for eviction.

In many cases the notice of eviction has to include the reasons why the tenant is being evicted. It should include what they could possibly do to avoid this. It may be that the property has been unkempt. If they comply and clean it up then the eviction will no longer be in place.

You also want to make sure the eviction notice includes the deadline. It should also contain any amounts of money including all fees that are owed. There may be a specific number of days that you have for filing this paperwork with your local court office. The eviction notice should be taped to the tenant’s front door as well as sent by certified mail.

In most cases you will need to file your eviction with the courthouse. Then you should be given a hearing scheduled date. The courts should also notify the tenants by way of  summons about this. You will most likely have to show that you have served the eviction notice in the proper manner.

Evict a tenant in CA means preparing yourself for your court attendance. Make sure that you have all of the pertinent documentation for the rental property for this tenant. This includes your lease agreements and all your records of payment. Any communication that you may have had with the tenant should be documented. You need  a copy of written notice and your proof that the notice was served. If you have checks that have been classed as NSF these also should be part of your documentation.

There will be a specific time allotted that the tenant will have to leave. If the tenant doesn’t comply then the Sheriff’s department can step in. This is to ensure that the court orders have been carried out. Tenant eviction is not a pleasant or easy task but is one of the responsibilities that come with this type of business. Knowing all the rules and regulations makes it a much easier process.

 

Skip the Headaches of Evicting a Tenant, Sell the House Fast Instead

Why go through all that’s required to evict tenants? You can skip the drama and headaches by selling your rental property and getting a cash offer from a company that buys houses in Madera. JRod Properties can make you a cash offer within a single day…even if there are tenants living in the house. Give us a call at (559)481-1025 and we’ll gladly talk with you about your situation and make you an offer to buy it at no charge.

 

The information presented in this article is for educational purposes only and should not be considered legal, financial, or as any other type of advice.

Understanding the taxes for selling rental property is an essential step to know when you’re thinking about selling a rental house. Selling a rental property comes with many steps, questions like “should I sell my rental property?”, and complications which may also involve tax implications. The taxes for selling rental property in CA can be incredibly confusing for plenty of reasons, but don’t worry – I’m here to help you out. In this article, we’re going to look at taxes on selling rental property in CA, how tax sales work, how to avoid paying capital gains, capital gains tax on sale of rental property, capital gains tax on sale of your second home and more.

Let’s go.

How taxes for selling rental property in CA work?

If you’re completely new to the real estate business and taxes on selling rental property in CA, you might be asking yourself how taxes work in the first place.

Here’s how:

HowStuffWorks states that each property is divided into assessment areas or assessment units.
The value of a property is determined by a tax assessor through property tax assessment.

“For example, the Rose City government has a $6 million budget and receives $3.5 million in sales tax revenue and state aid. Rose City needs to raise $2.5 million in property taxes to cover the budget. $6,000,000 – $3,500,000 = $2,500,000”

Some of the property cost can be recovered with depreciation.

What is depreciation?

Depreciation is a tax deduction which allows you to recover costs of a particular property.

Residential rental properties can be depreciated over 27 ½ years with MARCS system or 40 years with an alternative system.

You cannot claim depreciation.

What happens if property taxes for selling rental property aren’t paid?

If your property taxes aren’t paid, you could face a fine and have your property seized. Not paying your taxes could also reflect badly on your credit score, making it difficult to purchase further properties. Please consult with the IRS Publication 594.

How to avoid paying capital gains?

Forbes identifies 14 ways to avoid paying capital gains when it comes to taxes for selling rental property in CA. I’ll cover 5 most important ones.

Stock exchange
Those with a good credit and appreciated securities can apply for a stock exchange with services who trade their stock with a diversified portfolio (however, equally valued). Who uses this option? Investors who are looking to avoid paying large capital gains on taxes for selling rental property in CA.

Health Savings Accounts
Contributing to health savings accounts will also mean you are able to receive a tax deduction. Please note that you might have to do more paperwork and no economic value can be gained from this.

Move to a lower tax bracket state
State taxes are different and depending on where you live, you can avoid paying state tax or lower it.

Give stocks to family members
You can give some of your stocks to family members in lower tax brackets. This is one of the most beneficiary ways to avoid paying capital gains.

1031 exchange
What is 1031 exchange? It’s another way to avoid paying capital gains – within 180 days of the sale you can roll your proceeds into a similar investment type. Please note that the rules to this exchange are very complex, however, by doing the 1031 exchange you can without a doubt avoid paying capital gains.

How to make capital gain or capital loss when you sell?

Capital gains or capital losses are made everytime you sell a rental property, unless the property was bought before 20th September 1985. These gains or losses can also be made from capital improvements since the acquired date .

The amount of your capital gain depends on the capital gain tax rate and as a result, according to Forbes, many gains are, in fact, never taxed.

If you co-own a property, capital gains or losses are made according to your property interest.

Capital gains or losses can be dismissed in the case of a rollover.

What is a rollover?

Rollover (disregarding a capital gain) applies in the case of a destroyed property or property which was transferred to a former spouse.

I need to sell my second house – what are capital gains tax on sale of second home?

The capital gains on sale of second home depend on the state you live in and how long you’ve lived in the house. Qualifications for partial exclusions are favorable, especially in the cases where you have rented your property for a certain amount of time while treated it as a residence prior to that.

The duration of the time you have to live in your second home and then rent it out depends on your state – for more information, contact your lawyer to make sure you receive correct information.

Sell Your House to a Cash House Buying Company

Ready to sell your house FAST?

JRod Properties is a cash buying company, ready to take your property off your hands. The property you want to sell needs repairs? Doesn’t matter – we’ll be happy to sell it regardless of its state. Give me a call and you will receive a cash offer in just 24 hours. Your house can be sold in a week!

If you need to sell your rental house now, and would like to get a no-obligation cash offer, call us now at (559)481-1025. Whether you decide to sell your house to us or not, we would like to help answer questions you might have about the process.
 

The information presented in this article is for educational purposes only and should not be considered legal, financial, or as any other type of advice.

Considering a Sale of Investment Property?

There can be plenty of reasons for wanting to. If you do, you need to be aware of the tax implications when selling rental property. There’s a lot to know…so let’s get started.

The sale of investment property requires considering the tax implications when selling rental property.  Make sure before making the final decision to sell your rental property that this is what you want to do. Dealing with the tax matters can be complicated and expensive.

Tax Rules When Selling Rental Property

The first thing you are going to want to become familiar with is the tax implications when selling rental property. This is going to involve capital gains or capital losses. The tax implications involve this area of the tax laws.

Taxes on selling rental property are going to include taxes at both the Federal and State level.

The difference between the sale price and the adjusted tax basis determines capital gains.

A rental property tax calculator can help determine this.

Capital gains can pertain to either short term or long term gains. This helps to determine what your selling rental property tax obligations will be.

Sometimes individuals purchase rental property and discover it’s not for them. Then they want to sell it within the year. This is considered short term so if sold at a profit then it would be taxed as short-term capital gains. Usually, this is taxed at the standard income tax rate.

Property held for longer than one year is subjected to a different tax rate. This is a long-term capital gain. The rate can range between 0% to 20% but most often falls within the 15% range. Again you can use a selling rental property tax calculator, to help you estimate the tax implications when selling rental property.

Selling rental property tax expenses determines the basis of the rental property. This usually is the amount that you paid for the property.

Plus, additional expenses that you incurred to make the sale. If events occurred that decreased  value then you can likewise decrease the basis amount. At the same time if you improved the property then you can add the value of these improvements to the basis.

There are some advantages to an increased basis as it can help to reduce the amount of taxes you will need to pay. At the same time, you can enjoy an increased tax deduction with a capital loss.

Possible Tax Deductions When Selling Rental Property

Pay close attention to rental property tax deductions when you are going to sell. You will still have your regular tax deductions for this property up until the time that you sell it.

It may be that when you are selling the property you are not going to realize a profit. This is going to put you into a capital loss situation.

You will be limited as to the amount you can deduct for this loss. You will be able to carry the loss forward for a specific number of years. Just as there are short term and long term capital gains the same applies for capital losses.

Owning the property for less than one year constitutes a short term loss. Whereas longer than one year is a long term loss. You will need to look at the current year’s allowable deduction limit for the capital loss.

You may also be able to qualify for passive losses. These could be included with your selling rental property tax deductions.

These losses occur when your property losses in a given year exceed the rental income. There is a cap on as to how much you can claim each year, but these losses may be able to be carried forward. When you sell the property you can apply any of these unused losses that occurred during the sale year.

One advantage you may want to take advantage of is selling your investment property and buying another.

It would have to be in the same category as an investment property. This applies to the 1031 tax rule. It can be complicated so you would want to rely on professional advice regarding this.

Some individuals sell their investment property so they can pay down their primary residence mortgage. This can create some substantial tax liabilities.

Tax Implications When Selling Rental Property

Researching your tax obligations when selling your rental property involves becoming aware of the law. This includes knowing the tax consequences that effect tax implications when selling rental property.

Property depreciates and the IRS realizes this so they have rules in place. This pertains to how the calculations are handled for your depreciation deduction. Basically, the rules are that depreciation applies over a 27.5 year period. So each year a portion of this can be used as a deduction against the profit you are making. It works out to  3.636% per year. Improvements have to be calculated into the depreciation formula.  Looking at rental property tax legalities when selling may mean other things to consider.

If you have been claiming depreciation you may be subjected to depreciation recapture tax.

Another area that includes potential tax consequences of selling a rental property is incurring the new Net Investment Income Tax. If this applies to you then you may have to pay an additional 3.8% on your net investment income. This is applicable to specific thresholds and deals with capital gains.

Being as this is not your principal residence you are not eligible for the capital gain exclusion. Which usually amounts to  $250,000/$500,000.

Selling Rental Property Taxes Implications Summary

You must be familiar with the various tax laws during the sale of investment property. This is so you don’t make any mistakes when determining what your profit will be after taxes.

You will most probably want to use the services of an accountant to assist you with this. Although you can use the selling rental property tax calculator. This will give you a good idea as to what your selling rental property tax figures will be. If you are really familiar with the tax laws and tax implications when selling rental property, you can use tax accounting software to help you file your taxes pertaining to your rental property sale.

 

Ready to Sell?

If you’re interested in selling your rental property give us a call at (559)481-1025. We buy houses in Madera and pay cash so that you can sell your house fast. Give us a call!
 

The information presented in this article is for educational purposes only and should not be considered legal, financial, or as any other type of advice.