TAX INFORMATION WHEN REPRESENTING SELLER IN FLORIDA

When you sell an asset such as real estate, stocks, or other investments in Florida, you may be subject to capital gains tax on the profits you earned from the sale. Capital gains tax is a tax on the difference between the sale price of an asset and its cost basis, which is the original purchase price plus any expenses related to the purchase and sale of the asset, such as closing costs or real estate agent fees.

In Florida, capital gains tax is imposed at the federal level and may also be subject to state tax, depending on your individual circumstances. The federal capital gains tax rate varies depending on your income level and the length of time you held the asset before selling it. Short-term capital gains, which are profits earned from assets held for one year or less, are typically taxed at higher rates than long-term capital gains, which are profits earned from assets held for more than one year.

Additionally, Florida does not impose a state income tax, which means that residents of the state are not subject to state capital gains tax. However, non-residents of Florida may be subject to state capital gains tax if the asset they sold was located in Florida or if they earned income from Florida sources.

It's important to note that tax laws can be complex, and the specific tax implications of selling an asset in Florida will depend on your individual circumstances. You may want to consult with a tax professional or accountant to ensure that you are meeting all tax obligations related to the sale of your asset.

If you are interested in buying an asset from a potential seller in Florida and want to understand the tax implications of the sale, here are some questions you could ask:

What is the cost basis of the asset you are selling?

This will help you determine the amount of profit the seller made from the sale and the potential capital gains tax they may owe.

How long have you owned the asset?

This will help you determine if the seller is subject to short-term or long-term capital gains tax rates.

Are there any expenses related to the sale that will affect the cost basis?

This could include closing costs, real estate agent fees, or other expenses related to the purchase and sale of the asset.

Have you consulted with a tax professional about the potential tax implications of the sale?

This will help you understand if the seller is aware of their tax obligations and has taken steps to ensure they are complying with tax laws.

Are you a resident of Florida? 

If the seller is a non-resident, they may be subject to state capital gains tax if the asset was located in Florida or if they earned income from Florida sources.

Have you paid off any outstanding tax obligations related to the asset?

This will help you understand if the seller has any outstanding tax liens or other obligations that could affect the sale.

Are there any other tax implications related to the sale that I should be aware of?

This will help you understand if there are any other taxes or fees that may be imposed on the sale, such as transfer taxes or property taxes.

It's important to note that these questions are not exhaustive, and the specific questions you ask will depend on the asset being sold and the seller's circumstances. It may be helpful to consult with a tax professional or accountant to ensure that you are asking the right questions and fully understanding the tax implications of the sale.

Several strategies can be used to potentially reduce or avoid capital gains taxes when selling a rental or additional property in Florida. Here are a few options to consider:

Utilize a 1031 exchange:

A 1031 exchange allows you to defer paying capital gains taxes on the sale of a rental or additional property by reinvesting the proceeds into a similar property. This can be a powerful way to avoid paying taxes on the sale of your property altogether. To qualify for a 1031 exchange, you must follow certain rules and timelines, so it's important to work with a qualified intermediary or tax professional to ensure you comply with all regulations.

Invest in Opportunity Zones:

Opportunity Zones are designated areas in economically distressed communities where investors can receive tax benefits for investing in real estate or businesses. By investing in an Opportunity Zone, you may be able to defer or reduce your capital gains tax liability.

Sell the property after you've lived in it: 

If the rental or additional property was previously your primary residence, you may be able to take advantage of the capital gains exclusion. This allows you to exclude up to $250,000 in capital gains ($500,000 for married couples) from the sale of your primary residence, as long as you meet certain requirements.

Take advantage of capital losses: 

If you have other investments that have lost value, you may be able to offset your capital gains taxes by selling those investments and using the losses to reduce your tax liability.

Donate the property:

If you are interested in supporting a charitable cause, you may be able to donate the rental or additional property to a qualified charity and receive a tax deduction for the fair market value of the property. This can help you avoid paying capital gains taxes on the sale of the property.

It's important to note that each of these strategies has specific rules and requirements, and the effectiveness of each strategy will depend on your individual circumstances. It may be helpful to work with a tax professional or financial advisor to determine the best approach for your specific situation.

Capital Gains

To calculate the capital gains tax on the sale of the rental property in Florida, you will need to determine the cost basis and the capital gain. The cost basis is the original purchase price plus any expenses related to the purchase and sale of the property, such as closing costs, real estate agent fees, and improvements made to the property. The capital gain is the difference between the sale price and the cost basis.

Assuming the cost basis of the property is $649,000 and the sale price is $900,000, the capital gain would be $251,000. As a married couple filing jointly in the US, your capital gains tax rate would depend on your income level and the length of time you held the property.

If you held the property for more than one year, the capital gain would be considered a long-term capital gain. In 2023, the long-term capital gains tax rates for a married couple filing jointly are as follows:

0% for taxable income up to $80,000

15% for taxable income between $80,001 and $501,600

20% for taxable income over $501,600

Assuming you fall within the 15% capital gains tax bracket, you would owe $37,650 in capital gains taxes at closing (15% of $251,000).

However, this is just an estimate, and there may be additional taxes, fees, or deductions that apply to your specific situation. It's important to consult with a tax professional or accountant for personalized advice.

Staging

Simple Ways to Boost Your Home’s Appeal Before Selling

There are several affordable and effective ways to increase your home’s appeal—and its chances of selling quickly.

Start by giving your property a light refresh inside and out. This includes basic tasks like decluttering living spaces, fixing leaky faucets, and tidying up the landscaping—pull any weeds and consider planting fresh flowers to boost curb appeal.

When showing your home to potential buyers or renters, it’s essential to remove personal items such as family photos, sensitive documents, and valuables. Replace them with neutral artwork or décor to help buyers visualize themselves living in the space. The goal is to create a clean, welcoming environment that appeals to a wide audience.

Whether you decide to stage your home yourself or hire a professional, the key is to neutralize and depersonalize. The level of staging can vary based on your budget and your local market—but even small changes can make a big impact.

To maximize exposure, consider allowing lockbox access for agents to increase the number of showings. If you prefer to schedule appointments, try to be as flexible as possible to accommodate interested buyers.

And don’t underestimate the power of first impressions online. Professional photography, video tours, and virtual walkthroughs are crucial in today’s market—and we provide these high-quality marketing services when you list your home with us.

Showings

The key to getting your home sold quickly is making it as accessible as possible to potential buyers. Flexibility is crucial especially when it comes to scheduling showings.

If your property is tenant-occupied, we’ll handle the coordination to ensure minimal disruption while still allowing for consistent buyer traffic. Our goal is to make the process smooth and efficient for everyone involved.

Your real estate agent will arrange both private showings and Open House events to showcase your home to a wide pool of qualified buyers. To stay ready, keep a daily checklist so you can tidy up and head out at a moment’s notice when a showing is scheduled.

Don’t forget about pets—find a temporary place for them during showings. While we love furry friends, a barking dog or roaming cat can be distracting and make it harder for buyers to envision the home as their own.

Marketing

At Chic Living Miami, we take a strategic and comprehensive approach to marketing your home. Here's what we do to maximize exposure and get your property sold:

MLS & Online Syndication

• Ensure your property is listed on the MLS. As a MIAMI member, my listings are featured on MORE than 500+ websites and Apps around the world and shared with more than 256 Partner Assocaitiona (The most os any Realtor association in the world) and links MIAMI properties to 2 million+ real estate professionals around the world. CLICK HERE

✔ Mail announcements to top-performing local real estate agents to generate immediate buzz.

✔ Host an exclusive Broker/Agent Open House to create early momentum.

On-Site Marketing

✔ Install a branded flyer box at the property (where allowed) with custom Just Listed flyers.

✔ Coordinate professional photography, videography, and drone footage to make your home stand out.

Digital Marketing & Paid Ads

✔ Launch a targeted paid ad campaign across Instagram, Facebook, Google, and YouTube.

✔ Build a dedicated property website with custom content and SEO to attract online traffic.

✔ Run Google Ads to drive qualified leads directly to your listing page.

Social & Community Promotion

✔ Share your listing across our digital channels, including:

– Facebook Marketplace

– Instagram Reels & Stories

– Google Business Profile & Google Marketplace

– Twitter / X

– Pinterest Boards

– LinkedIn Real Estate Groups

– Nextdoor Community Platform

– Our website: www.ChicLivingMiami.com

Blog Promotion & SEO

✔ Publish and promote a listing blog post featuring highlights of your home, optimized for search engines.

Performance Tracking & Optimization

✔ We monitor all campaign analytics, ad performance, and listing engagement to fine-tune our strategy until your home is SOLD.

Offers

If your home is priced strategically, you may attract multiple offers—especially in a competitive market. This is where your real estate agent becomes your strongest advocate, guiding you through the offer process with expertise and confidence.

Your agent will help you evaluate each offer beyond just the price considering terms, contingencies, and financing strength to determine which one best aligns with your goals.

Transparency is key. Be sure to disclose any known issues with the property upfront to avoid potential legal complications down the road.

When an offer comes in, you have three options:

• Accept it as-is
• Make a counter-offer
• Reject the offer entirely

Negotiations are often part of the process. It's common to go through a few rounds of counter-offers before both parties reach a mutually beneficial agreement.

Closing & Moving

Schedule your move

You will want to get movers scheduled as soon as possible. Make sure to avoid scheduling the move and closing on the same day if possible. If you will be doing renovations, start getting quotes from contractors.

Make sure you set up the transfer of utilities for closing day.

Closing

Closing marks the official completion of your home sale. During this final stage, the deed is delivered, title is transferred, and closing costs are settled. Documents such as title insurance, loan payoffs, and seller disclosures are signed and exchanged.

Be prepared for typical closing costs, which may include:

• Agent commissions

• Title and escrow fees

• Recording and filing charges

• Outstanding property taxes or HOA dues

We’ll request a preliminary settlement statement (HUD) to review these costs in advance, so there are no surprises.

Don't forget to re-key all the locks and change the garage door opener code when the property is officially yours.

Congratulations on your new home!