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SALES MEETING TOOL KIT: REAL ESTATE TAXES 101 |
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 Real Estate Taxes 101, Introduction Component 1: Facilitator Talking Points Component 2: Real Estate Taxes 101 Meeting Agenda Component 3: Activity 1, Common Real Estate Tax Mistakes Quiz Component 4: Answer Sheet for Activity 1, Real Estate Tax Mistakes Component 5: Handout 1, What Can You Deduct When You Own a Home? Component 6: Activity 2, What Tax Deductions Mean to the Homeowner Component 7: Handout 2, What’s Your Real Gain? Component 8: Handout 3, A Basis Worksheet Component 9: Handout 4, Improvement vs. Repair Component 10: Activity 3, Name That Tax, or How Fast Can You Calculate Component 11: Answers for Activity 3, Name That Tax, or How Fast Can You Calculate Component 12: Other Resources |
Component 1: Facilitator Talking Points These notes will guide you and your salespeople through a discussion and activities on the basics of federal taxes that affect residential real estate. Pre-meeting preparation
Print the following: 1. These facilitator talking points—Component 1 2. Real Estate Taxes 101 Agenda—Component 2 3. Activity 1: Common Real Estate Tax Mistakes Quiz—Component 3 4. Activity 1: Real Estate Tax Mistakes Answer Sheet—Component 4 5. Handout 1: What Can You Deduct When You Own A Home?—Component 5 6. Activity 2: What Tax Deductions Mean to the Homeowner—Component 6 7. Handout 2: What’s Your Real Gain?—Component 7 8. Handout 3: A Basis Worksheet —Component 8 9. Handout 4: Improvement vs. Repair—Component 9 10. Activity 3: Name That Tax ( A Calculation Contest)—Component 10 11. Activity 3: Name That Tax Answer Sheet—Component 11 12. Other Resources—Component 12 Welcome (1 minute) Background, objectives, and goals (2 min.) Explain that federal tax policies that offer deductions for common homeownership expenses such as property taxes and mortgage interest make homeownership more affordable and attractive to U.S. citizens. Although tax benefits are almost certainly not the main reason people buy homes, they play an important part in the stability and strength of the U.S. real estate market. In this meeting, we will:
Note to facilitator: Throughout the meeting, emphasize the importance of encouraging clients to seek professional help in calculating their tax liabilities. Activity 1: Common Real Estate Tax Mistakes Quiz (5 min.) Let participants take this brief quiz (Component 3) to see how up to date they are on taxes affecting homeownership. Use the Answer Sheet (Component 4) to review the answers and determine what tax areas participants understand. Emphasize the changes in the federal capital-gains tax laws that took effect in 1997—particularly the introduction of the $250,000 gains exclusion. Point out how much more affordable it is now for consumers to buy and sell real estate more frequently. Handout 1: What Can You Deduct When You Own A Home? (10 min.) Review some of the major costs associated with acquiring, owning, and selling a home, and how each is treated for tax purposes. Use a flip chart to create a checklist that participants can give to buyers and sellers about common real estate deductions. Point out when vacation homes sometimes qualify for these deductions. (Be sure to have your list reviewed by the company’s accountant before distributing it to clients.) Activity 2: What Tax Deductions Mean to the Homeowner (5 min.) Use the example in this handout to teach participants a simple calculation that they can use with their clients to demonstrate the value of homeownership. Next, ask participants to do their own calculation of tax savings using the second example. The correct answer to this question is $9,482 of total expenses, resulting in a savings of $2,560.95 ($9,482 X .27). Handout 2: What’s Your Real Gain? (5 min.) Review the basics of how capital gains are calculated for real estate. Although the current exclusion of $250,000 for individuals and $500,000 for married couples filing jointly means that many homeowners are exempt from capital-gains liability, capital gains may still impact some older individuals who have owned their homes for a long time or owners who resell their homes in less than two years. Handout 3: A Basis Worksheet (5 min.) Use Handout 3 to help participants understand what costs the buyer and the seller may apply to increase or decrease their cost basis. Review the difference between a capital improvement, which materially adds value or extends useful life, and a repair. Handout 4: Improvement vs. Repair (5 min.) Distribute Handout 4: Improvement vs. Repair (Component 9) and use it to help participants develop lists of items that would be considered capital improvements (and thus added to the base cost of a home for tax purposes). Write additional items on a flip chart divided into two columns and have participants write them in the spaces on Handout 4. Activity 3: Name That Tax (10 min.) Hand out copies of three tax calculations scenarios (Component 10), and let participants calculate the answers to each set of questions. Offer a small prize, such as a $5 lunch coupon, to the participant who calculates the correct answer to each scenario the fastest. Use the Name That Tax Answer Sheet (Component 11) to prompt the right answers. Adjourn. Thank participants for attending. Component 2: Agenda > |