When the taxpayers demolished their existing principal residence, built a new home on the land, and sold it before ever occupying it, the Tax Court ruled the gain resulting from the sale of the never-occupied home did not qualify for exclusion under IRC Sec. 121 (Court case: Gates).

No later than five business days after the transfer of the qualified indicia of ownership to the EAT, the taxpayer and the EAT enter into a QEAA that provides that the EAT is holding the property for the benefit of the taxpayer in order to facilitate an exchange under IRC Sec. 1031 and Rev.

@Caroline GerardoThe original poster mentioned "25K against W-2 Income" - This is a specific exception allowed by the IRS for those with rental incomes reported on schedule E.The poster did not mention STR or even LLC / S-corp...The IRS is understanding of taxpayers reporting a loss on schedule E because of depreciation(non-cash tax expense)...Also, Juan did not mention that he only makes $25,000...

So essentially the tax payers footed the bill..

Its worth mentioning, most homes listed will show tax payment history which will also give you an idea of what to expect.

I understand that a typical rental analysis takes the monthly rental amount, sets aside 5% for vacancies, estimates 50% for expenses, and then makes sure the remaining 45% pays debt service and leaves a profit.But I've noticed that mortgage calculators often include insurance and tax payments in their monthly mortgage payment estimates.

The back door Roth IRA restriction is also back in the newly drafted bill for taxpayers with over $400k of annual income.

Well I’m trying to buy a duplex in the Belleville area and a lot of those homes are 120,000 with 3,000 yearly tax payment  or slightly lower even ones that are on the lower price range like 100,000 have high taxes like this property right here https://www.biggerpockets.com/...

Meaning a person can be both a dealer and investor.To determine if the taxpayer is a dealer three questions must be answered:(a) What is the taxpayer's trade or business?

However, only your accountant knows all the facts and the sale may potentially not be subject to the $3,000 annual loss limitation if it is a section 1231 / 1245 / 1250 asset.Furthermore, many taxpayers think they have a loss when in reality they have income(they forget to reduce the basis by the accumulated depreciation).In addition, you may have suspended passive losses that may be released upon sale.