Insurance Agent · AZ · Member since 2013 · 306 posts · 161 votes
Hello BP! I'm curious about taxes and closing at the end of the year, versus at the beginning of a new year? I'll obviously speak with someone regarding tax implications, but as I think about buying a property at the end of 2017 or beginning of 2018, I wanted to find out which is (in general for tax purposes) the best time to close on a property?
I seem to remember (in the recesses of my mind) some benefits of closing at the end of the year versus at the beginning of a year? Just curious to see what others have found to be beneficial.
@Chanté Owens, I have not found a large difference. I personally prefer to close at the end of the year, you don't get much depreciation but you can use some acquisition costs as deductions. If the property is empty I try to put the closing off until after the end of the year and try to go as far as I can towards summer. It is easier to fix properties up and to rent them in the spring as compared to winter.
@Jerry W. That makes sense; especially for a rental. My first property will be a condo (I know, I know, a lot of people hate them :). I will get the FHA loan, live in it, and then rent it out and buy a duplex or triplex. In my situation, a December closing would be perfect if I didn't have to make a loan payment for 45-60 days, because I could get the painting, flooring, etc done, before I move in and I would still be in my apartment and not have to stress about moving, as I would have until the end of February.
Conversely, if I didn't close until late January or February, I'd have less time to get things done that are easier to do when it's empty, because if lease was up,then I would have to move out, since I wouldn't want to make a mortgage and rent payment (if at all possible).