Saturday, October 1, 2022
52.1 F
Myrtle

What Is The Bright-Line Test? Find Out Here

Must read

Marleny Huckshttp://MyrtleBeachSC.com
Marlene (or Marleny as she is known in Spanish) is a mentor, teacher, cross-cultural trainer, storyteller, writer, and for those who have been under her leadership or simply sat across the table from her, she is a mirror of destiny. Her love of word and image were formed early on by one of her heroes, Dr. Seuss. If you asked those who know her well, they would describe her a compassionate, funny, wise, curious, honest, real, strong, sensitive and totally human which comes out as she teaches and writes. She sees all of life, even the most mundane, through faith and believes that who we become as we live this side of the veil is what matters not the journey itself or our circumstances. Marleny Hucks has spent her life crossing bridges. She comes from a diverse background of ministry roles and contexts as well as has transitioned in and out of the business world. Having lived outside the country as well as traveled extensively she has a fascination with culture causes her to live her life within a global mosaic no matter where her feet are planted. Marlene currently lives in South Carolina with her husband David, who owns a news company but who she says is a “crime fighter”, bringing light into darkness in their systems of their city. Marleny currently works as a content management specialist covering Myrtle Beach News for MyrtleBeachSC News.

What is the Bright-Line Test? This is a question that many people are asking, especially those who own property. The Bright-Line Test is a new law that was put into effect on the 1st of October 2015. It basically states that if you sell or gift property to someone, and it’s within two years of when you bought it, then it’s considered a taxable event. Let’s take a closer look at what the Bright-Line Test is and how it could affect you!

1. What is the Bright-Line Test?

The Bright-Line Test is a new law that was put into effect on the first of October 2015. It basically states that if you sell or gift property to someone, and it’s within two years of when you bought it, then it’s considered a taxable event. This applies to any property, whether it’s your home, an investment property, or even land.

Latest Horry County News in your inbox

Swash Transparency 330x200 logo

Stay Informed

So, if you’re thinking about selling your property within two years of buying it, then you need to be aware of the tax implications. The good news is that there are some exceptions to the rule, so not every sale will be taxable. For example, if you sell your home because you’re moving overseas or downsizing, then you won’t have to pay any tax. The other exception is if the property was inherited. In this case, the two-year rule doesn’t apply and you can sell the property without paying any tax.

2. How does the Bright-Line Test work?

If you sell or gift property within two years of buying it, then it’s considered a taxable event. This means that you’ll have to pay income tax on any profit you make from the sale. The amount of tax you’ll have to pay will depend on your marginal tax rate. For example, if you’re in the 30% marginal tax bracket, then you’ll have to pay 30% of any profit you make from the sale as income tax.

3. Will your old Property be Subject to the Bright-Line Rules?

The answer to this question is maybe. If you owned your house prior to the introduction of the bright-line test on October the first two thousand and fifteen, then any sale after that date may be subject to income tax. It depends on how long you’ve owned the property. If it’s been less than two years since you bought it, then it will be subject to the Bright-Line Test and you’ll have to pay income tax on any profit you make from the sale. 

However, if it’s been more than two years, then the Bright-Line Test won’t apply and you won’t have to pay any tax. You should know that the Bright-Line property rule may have changed since you purchased your house so it’s important to check with a tax advisor or the IRD to make sure. So, if you’re thinking of selling your property, then make sure you’re aware of the Bright-Line Test and the implications it has on your taxes.

4. Is it a capital gains tax?

The Bright-Line Test is not a capital gains tax, but it’s often confused with one. A capital gains tax is levied on any profit you make from selling an asset, such as shares or property. The main difference is that a capital gains tax only applies to assets that have increased in value, whereas the Bright-Line Test applies to all properties regardless of whether they’ve increased or decreased in value.

So, if you sell your property for less than you paid for it, then you won’t have to pay any capital gains tax. However, you will still have to pay income tax on any profit you make from the sale under the Bright-Line Test. This is why it’s important to be aware of both taxes when you’re selling property.

5. Is it good for home buyers?

The Bright-Line Test is generally seen as being good for home buyers. This is because it encourages people to hold onto their properties for longer periods of time. This, in turn, stabilizes the housing market and makes it easier for first-time home buyers to get on the property ladder.

So, if you’re thinking about buying a property, then the Bright-Line Test is something you need to be aware of. It could have an impact on your decision of whether to buy now or wait a few years. However, remember that there are exceptions to the rule, and not every sale will be taxable. Make sure you understand the implications before making any decisions!

This is what you should know about the Bright-Line Test. It’s a tax that applies to any property you sell or gift within two years of buying it. There are some exceptions to this rule, such as if you’re selling your home because you’re moving overseas or downsizing. If you’re thinking about selling your property within two years of buying it, then make sure you understand the implications of the Bright-Line Test!

Want the latest Myrtle Beach SC news?

Receive Free updates in your inbox.

Comments

comments

- Advertisement -

More articles

JOIN OUR COMMUNITY

MyrtleBeachSC, Horry County

news in your inbox.

SIGN UP NOW

Swash Transparency 330x200 logo

Latest article

- Advertisement -