Real Estate Taxation

This chapter indicates that almost all state governments have a tax that is a percentage of the real estate's value. In California, the tax is assessed by the tax assessor in the county in which the real property resides. The tax rate is approximately 1.125% of the fair market value (FMV) of the real estate. In respect to taxation in the event of a sale, the basic rule is that the profit or loss must be reported in the year of sale and the applicable tax paid, unless an exemption applies or the profit or loss is excluded from reporting. When the owner cashes out, sells his/her property, a gain or loss occurs. One might be aware that barring some exceptions, the general rule is that rule, a refinance is a non-taxable event. It is always better to defer taxes rather than to pay them at present, provided the exchange transaction make economic sense.