Chesapeake Bay Real Estate Blog

This blog is dedicated to the real estate market on the Eastern Shore of Maryland and the surrounding Chesapeake Bay region. We are here to let you know about ourselves, our services real estate listings, and why we love helping people achieve their real estate goals. Real estate isn’t just about selling or buying houses; it’s about people and their families. That is why we do our best to make a difference in each person’s move.

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Location: Easton, Oxford, St Michaels, Cambridge, Queen Anne's, Kent, Eastern Shore of Maryland

While Penny was raising their four children, Bob worked in the corporate world for 20 years and became President and CEO of a major, publicly held, transportation company. Afterwards, we decided to leave the hustle and bustle of New Jersey and move to Vermont where we became entrepreneurs in a successful small business. We established an apple orchard, a vegetable farm, a popular country store as well as a multi state mail order operation. Fifteen years later, we “retired” to Florida, where we spent eight years as full time real estate agents. After deciding to be closer to our family, we moved to the Eastern Shore, to continue serving homebuyers and sellers as associates with RE/MAX On The Bay serving Talbot, Dorchester, Kent, Queen Anne’s and Caroline Counties. Our business experience helped us to develop extensive sales programs using leading edge technology such as websites, e-mail systems, digital photography, virtual tours, and multi-media presentations. Our customers and clients benefit directly from these advanced marketing tools because The Halls can offer unparalleled exposure and attractive promotions for the home seller as well as fulfilling the needs of home buyers

Monday, January 23, 2006

Capital Gains and Taxes

It’s January—time to start thinking about taxes again. Here is a summary of the current rules regarding capital gain on personal residences and investment property. Taxation on the two is very different.

Personal Residence

The current rule permits individuals to exclude up to $250,000 of capital gain from taxation, and married couples filing jointly to exclude up to $500,000. Any amount of gain above these limitations would be taxed. The exemption can be taken per transaction. That means that the determination of whether or not the gain will be taxed is made at the time of sale.What the homeowner does next—buy a more expensive home, buy a less expensive home, or not buy at all—has no impact on the determination. The current rule does have the limitation, however, that the property must have been used as the taxpayer’s principal residence for at least two of the past five years. If that is not the case, it is recommended that the homeowner speak with an accountant to determine what tax implications the sale of their property may have.For full details, see IRS publication 523 “Selling Your Home,” at

Income or Investment Property

It’s a different story for investors. When investors sell property, they pay taxes on capital gain. However, it is possible to sell rental property or land and not pay any capital gain taxes. How? Through Internal Revenue Code 1031, which states: No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment. Exchanging property for property allows the tax to be deferred to later years. This gives investors a wide range of investment freedom. IRC 1031 Tax Deferral can range from transactions involving the simple trade of two properties to complex, multi-property exchanges. Contact your financial advisor to determine the exchange strategy that is best suited for your situation.


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