(641) 231-1412

Clear Lake IA Real Estate  Homes & Condos for Sale (641) 231-1412Clear Lake IA Real Estate Homes & Condos for Sale (641) 231-1412

Team Kopriva Real Estate - Real Estate Agent in Clear Lake, Iowa

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Capital Gains

Understanding Capital Gains in Real Estate

It’s an objective opinion of value, but it’s not an exact science so appraisals may differ.

When you sell a stock, you owe taxes on your gain—the difference between what you paid for the stock and what you sold it for. The same is true with selling a home (or a second home), but there are some special considerations.

How to Calculate Gain

  • In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate this:
    • Take the purchase price of the home: This is the sale price, not the amount of money you actually contributed at closing.
    • Cost of the purchase—including transfer fees, attorney fees, inspections, but not points you paid on your mortgage.
    • Cost of sale—including inspections, attorney’s fee, real estate commission, and money you spent to fix up your home just prior to sale.
    • Cost of improvements—including room additions, deck, etc. Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.
  • Add adjustments:
  • The total of this is the adjusted cost basis of your home.
  • Subtract this adjusted cost basis from the amount you sell your home for. This is your capital gain.

A Special Real Estate Exemption for Capital Gains Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:

  • You have lived in the home as your principal residence for two out of the last five years.
  • You have not sold or exchanged another home during the two years preceding the sale.

Also note that as of 2003, you also may qualify for this exemption if you meet what the IRS calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.

Does Moving Up Make Sense?

Answer these questions to help you decide whether moving up makes sense.

  • How much equity do you have in your home? Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of paying a mortgage, but if you’ve owned your home for a number of years, you may have significant unrealized gains.
  • Has your income increased enough to cover the extra mortgage costs and the costs of moving?
  • Does your neighborhood still meet your needs? For example, if you’ve had children, the quality of the schools may be more of a concern now than when you first purchased.
  • Can you add on or remodel? If you have a large yard, there might be room to expand your home. If not, your options may be limited. Also, do you want to undertake the headaches of remodeling?
  • How is the home market? If it’s good, you may get top dollar for your home.
  • How are interest rates? A low rate not only helps you buy more home, but also makes it easier to find a buyer.

Contact Jenny

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I have bought several homes in my life time. Jenny is the best Realtor that I have had the pleasure to work with. She has integrity that is hard to find in the Real Estate business. She will do research if she doesn't know something. She has a very quick turn around on all requests.

John Arnold

10 out of 5 STARS for JENNY and BOB KOPRIVA...and here is why... Our family of 5 needed to decide if we were going to move to Clear Lake, IA from our home town, Duluth, MN by February 1. We began looking at the Clear Lake community in October and we lived 5 hours away.

Chris and Martha Byrnes

Jenny helped me through a short sale of a home I truly wanted in Clear Lake. She did a tremendous job and I would recommend her to anyone buying or selling a home in Clear Lake. Thanks Jenny!

DWright

During my recent search and subsequent purchase of a condo in Clear Lake, Jenny Kopriva was extremely helpful throughout the entire process. Jenny was very knowledgeable of all available properties and was expedient in communicating any new properties that became available during my search process. Jenny was always available to answer any questions, and went

Steve Husome

Jenny Kopriva is a top notch professional and helped me from beginning to end in purchasing a home in Clear Lake. Her expertise in the market place, on-going communication, and exceptional guidance is unsurpassed and the best that I have worked with. I highly recommend Jenny for any real estate transactions and am confident the

Kim Windmuller

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Client Reviews

I have bought several homes in my life time. Jenny is the best Realtor that I have had the pleasure to work with. She has integrity that is hard to find in the Real Estate business. She will do research if she doesn't know something. She has a very quick turn around on all requests.

John Arnold

10 out of 5 STARS for JENNY and BOB KOPRIVA...and here is why... Our family of 5 needed to decide if we were going to move to Clear Lake, IA from our home town, Duluth, MN by February 1. We began looking at the Clear Lake community in October and we lived 5 hours away.

Chris and Martha Byrnes

Jenny helped me through a short sale of a home I truly wanted in Clear Lake. She did a tremendous job and I would recommend her to anyone buying or selling a home in Clear Lake. Thanks Jenny!

DWright

During my recent search and subsequent purchase of a condo in Clear Lake, Jenny Kopriva was extremely helpful throughout the entire process. Jenny was very knowledgeable of all available properties and was expedient in communicating any new properties that became available during my search process. Jenny was always available to answer any questions, and went

Steve Husome

Jenny Kopriva is a top notch professional and helped me from beginning to end in purchasing a home in Clear Lake. Her expertise in the market place, on-going communication, and exceptional guidance is unsurpassed and the best that I have worked with. I highly recommend Jenny for any real estate transactions and am confident the

Kim Windmuller

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ABOUT AGENT

Your Neighborhood Real Estate Expert – Serving North Central Iowa Focusing on Clear Lake and Mason City. As is often said, real estate is about location, location, location. We bring this same dedication and professionalism when offering our real estate services to you.

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Jenny Kopriva

Broker Associate

Lakeside Brokers
314 N 7th St Suite 3,
Clear Lake, IA 50428
Cell : (641) 231-1412

TESTIMONIALS

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Jenny took the time to get to know us and what we were looking for in a home. That made finding the perfect home in the best location so much easier. We felt comfortable and respected through the entire process. Jenny followed up after the purchase of our new home by inquiring about our satisfaction

Kate Richtsmeier

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