Dear Friends & Neighbors:

2004 was an outstanding year in Real Estate! Over 200 homes were sold in Brookside! We saw a dramatic increase in the average sales price of homes in Stockton. It went up 37% from 2003. Very few homes in the market and many buyers waiting to buy. Many of my own listings went over the asking price.

I helped 130 families to buy and sell in 2004. Many of these families were in Brookside and Brookside West. My Team and I sold higher end homes as well as first time buyer homes throughout the valley.

We are expecting another year of low inventory and higher demand on purchases and sales. I Therefore, I want to ask you now if you know of anyone thinking of selling in Brookside, please call me immediately, I have buyers waiting for all price ranges lowlabove $500,000 and over one million dollars.

I live in Brookside and always present to my clients the benefits of our community, the pool, tennis courts, the country club, and of course the golf course. Work with someone that knows the area and knows Real Estate in your neighborhood.

I sincerely appreciate your referrals, your business and your friendship. We wish the best for you and your family.

Thank you, your realtor and friend,

P.S. Please call me at (209) 955-5535 if you have any questions or would like a Free market
analysis with no obligation.

By:  Michael D. Luis, CPA

                     - Mike Luis is a practicing “CPA”     with Iacopi, Lenz  & Company. He counsels  his clients in areas of real estate and general taxation, and may be contacted at   209-957-3691.

We have some good news from the IRS regarding the home sale gain exclusion rules.  As you are probably aware, the IRS currently allows individuals to exclude from income gains of $500,000 (for married couples) and $250,000 (for single individuals) from the sale of principal residences unless the individuals have only owned or used the home for less than two of the five years preceding the sale, or if the gain exclusion was claimed by the individuals within the    last two years.  However, if a home sale does not meet these time tests, the taxpayer will be allowed a reduced exclusion if the sale occurred due to one of the following three reasons:  (1) a change in place of employment; (2) for health reasons; or, (3) “unforeseen circumstances”.

The IRS recently issued temporary guidance to help determine of individuals meet one of the above qualifying exceptions.  First, these exceptions for change of employment, health reasons, or “unforeseen circumstances” were broadened in that they may be attributable to any “qualified individual” which includes (in addition to the taxpayer and spouse) a co-owner of the residence or any person whose principal place of abode was the taxpayer’s residence.  For the health exception, the definition now includes family members of qualified individuals (such as a sick child, parent grandparent, or sibling).  If a physician recommends a change of residence for health reasons, the sale automatically qualifies.  However, this health exception does not apply if the move merely improves general health.

The most vague exception has been the provision

covering “unforeseen circumstances” which is now defined to generally include the following safe harbor events: (1) involuntary conversion (for example, fires, and floods) of the residence; (2) damage to the residence from a man-made disaster, war or act of terrorism; or (3) any of the following events affecting a “qualified individual” (as defined above): death, divorce or legal separation, becoming eligible for unemployment compensation, change in employment status that leaves the taxpayer unable to pay housing costs and basic household living expenses, or multiple births resulting from the same pregnancy.  I have recently seen individuals meeting these newly defined exceptions which have tremendously  helped to reduce their tax  liabilities.   

The above temporary guidance is subject to change following public comment.  However, if it is accepted as is, it can be applied on a retroactive basis.  Thus, If you have previously paid income tax on a gain from sale of a principal residence for which an exclusion is allowed by these new rules, an amended tax return can be filed to obtain a tax refund so long as the year is not closed by the statute of limitations….   

Is Your House Insurance Up to Date?

With escalating real estate values in California, homeowners insurance may not be keeping pace with actual property values.  This would apply not only to principal residences, but vacation homes as well as rental and commercial properties.

As a reminder, real property insurance coverage is generally for the structure and contents...not the underlying land.

If insurance coverage needs to be increased, policy deductibles can also be adjusted to help offset the additional premium cost.

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