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Tax Planning for Home Seller

They say that nothing is certain except death and taxes. However, since 1997, the obligation of a homeowner to pay taxes upon the sale of his or her home has become certainly less frequent. Prior to Congress passing the Taxpayer Relief Act of 1997, unless you were older than 55 years of age or bought a more expensive home within two years of selling, you would have had to pay a tax on any profit (capital gain) made on your sale. A capital gain is the difference between the sales price of the home less the sum of the purchase price you paid and the cost of any capital improvements you made. A capital improvement, discussed in detail below, is an improvement made to the home or property which increases its value and/or prolongs its life.

As a result of the Taxpayer Relief Act of 1997, home sellers can breathe a little more easily. Now, the law exempts from taxes any capital gain up to $500,000 for married couples filing jointly and up to $250,000 for single sellers. In order to qualify for the exemption, you are required to have lived in the home as your principal residence for 2 out of the 5 years prior to the sale. In addition to establishing these exemptions, the 1997 law also reduced the rate that one has to pay on the taxable portion of a capital gain- from 28% to 20%. When the law was first introduced, home-based business owners who took the home-office deduction on their tax returns, would not be able to obtain a capital gain exclusion on that portion of the home designated as a work place. In 2002, the federal government tinkered with this portion of the law, and now, as long as your work place is located within the home itself, and not in an accessory building on your property, you are entitled to the full tax exclusion on any capital gains realized. The government has also adopted an “Unforeseen Circumstances” exception to the “2 years out of the last 5 years” requirement. If you are forced to sell the property before you occupy it for 2 years due to an event that you could not have reasonably anticipated prior to purchasing and occupying the home, you will be allowed to use the exemption. Such circumstances that would allow you to claim “unforeseen circumstances” are: divorce, death of one of the homeowners, health problems which require you to sell to obtain treatment, loss of employment, multiple births from the same pregnancy, and natural or man-made disasters. Voluntary events such as marriage, adoption, and job relocation probably will not qualify.

To appreciate the significant effect of the 1997 Taxpayer Relief Act, let’s consider the following two examples:

Pre-1997: A married couple under age 55 and in the 31% tax bracket sold their home that they have lived in and owned for 5 years for $400,000 (representing a $100,000 profit) and bought another home in another, less-costly town for $375,000. As they did not purchase a home of equal or greater value, they would have had to pay $100,000 (capital gain) x 28%; or $28,000.

Post-1997: Using the same facts, since the couple lived in and owned the home for at least 2 of the last 5 years, and since the capital gain is less than $500,000, this married couple will pay zero capital gains tax.

Even though capital gains tax obligations are now fewer in number as a result of the law change, they nevertheless can still be quite, shall we say, taxing. As a result of the very strong surge in property values over the last decade and in years before, it is common for homeowners who have lived in their home for some time to sell their home for at least $250,000 or $500,000 more than they originally paid. When this is the case, it is important to attempt to minimize tax liability by maximizing your home’s basis. The basis is the value of your investment in the property. It includes the purchase price plus acquisition costs (i.e. closing costs) plus capital improvements.

To calculate your full basis, you (and your tax advisor) will first need to have a complete breakdown of the closing costs you incurred at the time of your purchase. The settlement statement will provide you with these figures. Next, you will need to add up the allowable capital improvements. In order for a home expense to qualify with the IRS as a capital improvement, it must improve the value of your home. Expenses incurred purely for cosmetic or maintenance purposes will not work. An addition to the home, a new kitchen, finishing the basement, or the installation of an in-ground pool are capital improvements; a replacement roof, grass cutting and snow removal expenses, and home heating fuel are not. For a comprehensive list of IRS allowed capital improvements, see IRS Publication 523, available at www.irs.gov. So, for example, if you paid $350,000 for your home, paid $7,500 for closing costs, including mortgage points, bank fees and attorney’s fee, and you paid $25,000 for improvements during your ownership, including the planting of new bushes, a finished basement, and new kitchen cabinets, your basis would be: $382,5000. If you instead inherited your home, your basis is the fair market value of the property as of the date of death of the prior owner.

In addition, in determining tax liability, you are allowed to use the net selling price. Therefore, be sure to add up the many costs you incurred as a result of your sale. These include the somewhat obvious: sales/ stamp tax, broker’s fee, attorney’s fee, recording costs; and the not-so-obvious: costs incurred in sprucing up the home for sale, advertising, and the fee for the lawn sign.

To better understand the current capital gains law, lets apply it to some varying fact patterns:

1) Nick and Margaret, a married couple who file jointly, bought their home in 1990 for $250,000 plus $5,000 in closing costs. They lived there as their principal residence continuously until 2005 when they sold it for $650,000, with $5,000 in closing and marketing costs. Over the years, the spent $40,000 for capital improvements. Their capital gain is $350,00:

There is no tax due because they: 1) are married; 2) lived in the property for 2 out of the last 5 years; and 3) the gain is less than the $500,000 exemption.

2) Joe and Carol, a married couple who file jointly, bought their home in 1975 for $80,000, plus $1,500 in closing costs. They have lived in it together until 2005 when they sold it for $900,000. They incurred $4,000 in costs to sell their home. They saved receipts and confirmation of expenses over the years showing capital improvements of $125,000. Their capital gain is $689,500.

Because the capital gain is greater than the $500,000 allowable exemption, they have a tax liability. They will have to pay: ($689,500 - $500,000) x 20%; or $37,900.

3) Millie bought her condo in 1996 during the buyer’s market and paid $75,000 and paid $2,000 in closing costs . She sold it 20 months later when she was able to get $125,000 for it, after paying $5,000 in capital improvements and $4,000 in closing costs. She has a capital gain of $39,000.

Although Millie’s capital gain is less than the $250,000 exemption, she will be liable for the capital gains tax because she did not live in the house for at least two years and does not qualify for the exemption. Millie will have to pay: $39,000 x 20%; or $7,800.

4) Jim bought his house in Connecticut in 2000 for $300,000 and paid $5,000 in closing costs. After he moved in, he finished the basement at a cost of $10,000. The next month, his company transferred him to Texas to work for three years. Believing he would return back to Connecticut, he kept his house and rented it over the next 3 years. The “temporary” position in Texas turned into a permanent opportunity and Jim sold his Connecticut house in 2003 for $550,000, incurring $10,000 in closing and marketing costs. His capital gain is $225,000.

Although Jim’s capital gain is less than the $250,000 exemption, he did not occupy the home as his principal residence for 2 out of the last 5 years; he rented it out. Therefore, he does not qualify for the exemption. Jim will have to pay $225,000 x 20%; or $45,000.

5) Chris and Deb, a married couple filing jointly, bought their house in 2002 for $250,000 and paid $3,000 in closing costs. At that time, Deb started a chocolate truffle business out of her home and wrote off 20% of the home as business use. Chris and Deb spent $50,000 on capital improvements. In 2005, they sold their home for $550,000, after incurring $10,000 for marketing and closing expenses. Their capital gain is $237,000.

As a result of the 2002 alteration to the law, Chris and Deb will be able to use the full $500,000 tax exemption and no capital gains tax will be due. Chris and Deb will be responsible for paying back the depreciation deduction that they have taken over the years at the rate of 25%.

6) Steve and Erica bought their 1 bedroom condo after their wedding in 2002 for $150,000 with $3,000 for settlement costs. The following year, Erica became pregnant and gave birth to triplets. The condo was much too small and they were forced to sell in order to buy a larger home. They sold their condo in 2003 for $200,000 after not incurring any capital improvements. They incurred $5,000 in sale and marketing costs. Their capital gain is $42,000.

While they would normally have to pay a capital gains tax of $8,400 (20% of the $42,000), they sold as a result of unforeseen circumstances; namely the birth of triplets. They will be able to use this exception and avoid any capital gains tax.

https://www.irs.gov/pub/irs-pdf/f1099s.pdf

If the seller informs the closing agent in writing that there is no chance for any capital gains tax liability, generally, the settlement agent will not file the 1099-S form. The settlement agent will use a form similar to that re-printed below to determine if such reporting is necessary. In order for eliminate the need for reporting, the settlement agent will need to see that all of the form’s questions have been answered “Yes”. (As a result of some double negatives used in the form, it may be easier to read the questions this way- if the statement is true, then check “Yes”. If not true, “No” should be checked.)

https://www.irs.gov/irb/2007-04_IRB/apa.html

1031 Exchanges

While those who are selling investment property are not entitled to the capital gain exclusion, they may be able to defer paying the tax if they purchase another income property of equal or greater value. This is referred to as a “Like-Kind Exchange” or a “1031 Exchange” after section 1031 of the Internal Revenue Code that states that no gain (or loss) shall be recognized on an exchange of property held for productive use for a business or for investment. In order to take advantage of this provision, the property seller must retain the services of a qualified section 1031 intermediary company prior to selling the property. As the sale proceeds are not allowed to be in the seller’s possession, the intermediary will hold the proceeds until a new “replacement” property is identified for purchase. The seller is required to identify the replacement property within 45 days of selling the “relinquished” property. In addition, the seller must purchase the replacement property within the “exchange period” which ends within the earlier of 180 days after selling the relinquished property or the due date for the seller’s tax return.

In order to qualify for a full tax deferral, the seller must meet two requirements. First, he or she must reinvest all proceeds into the replacement property. Second, he or she must acquire the replacement property with an equal or greater amount of debt. If the seller fails to do either of these, the I.R.S, considers any applicable amount to be a benefit to the seller, and he or she will be liable for a tax.

Here, the Seller obtained the replacement property using all of his $190,000 sale proceeds and obtained a mortgage greater than what he previously had. Therefore, he will be able to defer all of the capital gain taxes.

Here, the Seller incurred less debt and used less than his full sale proceeds. Consequently, the IRS will determine that he obtained a $115,000 benefit, and this will be taxable.

Update for Business Owners: Fair Wage Bill Signed into Law

On August 1, 2016, Governor Charlie Baker signed Chapter 177 of the Acts of 2016 into law. This new law amends the Equal Pay Law, Chapter 149, Section 105A-C, which states that there should be equal pay for equal work.

Though Massachusetts has had an equal pay law since 1954, it lacked clarity and a comprehensive definition of what “comparable work” meant. Before the new law came to pass, this lack of transparency about what qualifies “comparable work” was providing employers with gray areas and hindering the progress of equal pay in Massachusetts. Specifically, the law was brought into question in 1998. Massachusetts’s Supreme Judicial Court denied a group of female cafeteria workers equal pay to the male custodians, citing that there were no grounds to determine if the work was comparable. With the new law, these gray areas have been eliminated.

Additionally, the new expansion to the Equal Pay for Equal Work Law prohibits employers from asking their employees for salary history when hiring, due to the fact that it can create a cycle of disparities in wage. It also allows employees the freedom of discussing their salaries with other employees without fear of employer retribution. This law applies to all employers and cites an” employer” as “any person acting in the interest of an employer directly or indirectly” (M.G.L. ch.149 §1). Along with these new revisions to Section 105 A through 105 C, is the opportunity for employers to do a self-evaluation of their wage practices to ensure they are complying with the law before it comes into effect at the beginning of 2018. Those employers who do the self-evaluation will have a positive defense to liability against any grievances filed within a three year period of their self-evaluation.

Employers who are found to be violating this law by practicing wage discrimination are liable to the employees affected and will have to compensate them for their unpaid wages, benefits, and other compensation (M.G.L. ch.149 §105A (b)). To read over the new law, please see the link below:

»https://malegislature.gov/Laws/SessionLaws/Acts/2016/Chapter177

Do You Know How Your Assets are Titled?

Estate Planning Pitfalls Can Occur if You Don't Know.

Estate planning is one of those things that individuals like to put off for another day. Much has been written about the problems that can come with a person's failure to execute basic estate planning documents, such as a will. However, little has been said about the all-too-common problems that can arise even after estate planning documents have been prepared and signed. Let's take a look at one such problem- the failure to examine and understand how your assets are titled and the complications that can result.

With estate planning, there are two types of assets: 1) probate assets; and 2) non-probate assets. Let's start with the second of these- non-probate assets. Non-probate assets are those assets that, by virtue of how they are titled, pass directly to other person upon death. They don't pass through a will, and, as a result, don't go through the probate process. For example, if Michael and Sarah have a joint savings account at the bank, that is a non-probate asset. If Michael passes away, his share of the joint account does not pass to the heirs he named in his will, but instead goes directly to Sarah. A life insurance policy with a named beneficiary is another example of a non-probate asset. If Michael names Sarah as his beneficiary to his life insurance policy with the life insurance company, and Michael dies, the life insurance company pays the benefit directly to Sarah, and it does not go to anyone else named in Michael's will. There are other examples, including with real estate which will be discussed below, but you can see, non-probate assets are those assets that already have a predetermined person to whom they will go upon the (co-) owner's death.

Probate assets are the other type of asset. These assets are titled (or are owned) only in the name of the person who dies and must go to their rightful new owner only through the probate process. For example, your computer that you are using to view this blog entry is a probate asset. It is owned by you and no one else. As a result, it would need to be probated in order to go to your desired heir once you pass away. Also, a bank account and a home that is only in your name are both other examples of probate assets. These assets must be probated upon death to go to their rightful new owner, your heir, whether that heir is named in your will or determined by the laws of your state, if you don't have a will. In other words, these assets would be part of the 'probate estate' that would need to be filed with the probate court.

Now, here is the little-known fact. A will only controls probate assets. A will does not control non-probate assets. Let's use an example to demonstrate: Michael, who is single, begins a job as a young man and takes out a life insurance policy. Not being married, he names his parents as the beneficiaries of this policy. Years later, he falls in love with Sarah and marries her and has two children. Michael, who wants to protect his wife and children, has a will professionally prepared that leaves everything he has to them. Michael then dies. The proceeds of his life insurance policy go to. . . his parents. That is because his life insurance policy is a non-probate asset (by the nature of how it is titled, the person who inherits the asset is predetermined). In this case, the parents are the pre-determined heirs of the life insurance policy because they are named as the beneficiary on the policy papers. Non-probate assets trump anything in the will that is to the contrary. It is not enough to provide for your desired heirs by naming them in a will, because that will guides how they inherit your probate assets. You also must examine how your non-probate assets are titled and make sure that your same desired heirs are likewise named. In our above example, Michael should have contacted his life insurance company and changed his beneficiaries of his policy to his wife and children and made other similar changes with all of his other non-probate assets.

Real estate is typically the most valuable asset people own. The titling of real estate (how it is owned) is set forth in the document called a deed. Similar unfortunate estate planning results can occur with deeds to real estate. There are two basic ways to own title to real estate with another person: 1) as 'tenants in common'; and 2) as 'joint tenants' (married people may own real estate as 'tenants by the entirety', but this is a just special form of joint tenancy). 'Joint Tenancy' allows the real estate to be a non-probate asset, such that when one person dies, the real estate passes directly to the other owner, outside of any probate process. 'Tenancy in Common' is just the opposite. If a person who owns a home with another as tenants in common passes away, his share does not go directly to the other owner, but instead passes to his heirs through the probate process.

The significance of these two-word (joint tenancy) and three-word (tenants in common) phrases comes to light in this real-life example: I recently had a woman client come see me after her husband died. She was the husband's second wife, and he had two children from his first marriage from whom he had been long estranged. He died without a will. Moreover, in his case, he and my client purchased a home prior to marrying and took title in the deed as 'tenants in common'. When he died, his share of their half-million dollar home did not go directly to his wife, as he no doubt would have wanted, but instead went through his estate, which then had to be probated. As he had no will, his children, albeit estranged, were now deemed heirs together with his wife. This made a very sad time for his wife even more trying. To have prevented this situation, the husband needed only to have changed the deed to 'joint tenants' or 'tenants by the entirety'.

As you can see, when it comes to estate planning, the best of intentions can be undone by failing to appreciate and understand the significance of how the assets are titled. Please feel free to call me if you would like to discuss your estate planning questions and needs.


TOP 10 TENANCY TIPS

1) Know your legal rights and responsibilities as a residential landlord. Knowledge of the law and how it affects you as a landlord is the single most important factor for being successful. Your tenant should not know more about your investment than you. Good landlords will get good tenants; bad landlords will get (and, unfortunately, deserve) bad tenants. (You would not open up a restaurant if you did not know how to cook.)

2) Treat your properties like a business. Set a formal, business-like tone with your tenant from the very start. Your rental property is an important investment for you, and your tenant must realize that you will treat it as such. There is no substitute for the written record. Communicate with your tenant in writing, even if it is email, and even to merely confirm a verbal conversation. Use Forms- and use the right forms. If you decide on a tenancy-at-will, reduce your agreement to writing and include lawful terms that are favorable to you and your specific situation. Use, incorporate into the tenancy agreement, and post the rules and regulations of the property for tighter control. Good tenants will welcome your rules and regulations. Don't use store-bought or internet forms. To document your intention of entering the unit (i.e. to inspect, make repairs, or to show the unit to a prospective tenant or purchaser)- always send or deliver notice at least 24 hours before going in and keep a copy for yourself. If the situation is contentious- bring a neutral third party witness, such as an off-duty police officer.

3) Document the Property's Condition at the Outset. Invest the time and money into getting your unit pre-inspected and obtain the occupancy permit and state sanitary code certificate before each new tenant moves in. This is the cheapest and most effective form of insurance for any landlord. Take photographs or video of the entire unit before the tenant moves in to properly document its initial condition.

4) Be Aware of Utilities. Make sure any utilities that Tenant is to pay are separately metered and that it is clearly in writing that they are to pay.

5) Use Rental Applications and Be Thorough. Be sure to have each applicant fully complete a rental application. Do your homework and check the references, and perform a thorough credit check on the applicant. When checking an applicant's references, always check with and give more weight to the previous landlord's reference rather than the current one. Don't allow the tenant to take occupancy until the application is fully completed. If you use a broker, look over his or her shoulder to make sure they have confirmed their credentials. A broker gets paid as soon as the tenant moves in- but then if the tenant turns out to be bad- that's now your problem.

6) Use Caution with Security Deposits. Do not take a last month's rent deposit or a security deposit unless you know, understand, and plan on following their detailed rules and procedures. If you have taken the time to thoroughly understand the rules and procedures, then you owe it to yourself to take both of these deposits. This will be for your protection and may eliminate less-qualified tenants.

7) Have an Attorney Close By. Develop a relationship with a landlord-tenant attorney even before any tenancy problem arises. Like any business, many potential large problems can be avoided by taking the right steps early on. A quick phone call to a retained attorney can often nip potential problems in the bud. Furthermore, retain a capable attorney at the earliest stage possible to represent you in an eviction matter. Too many landlords attempt to represent themselves and invariably make a mistake. Even with the subsequent hiring of an attorney, an initial mistake (such as with the notice to quit) may be impossible to correct and may jeopardize the eviction. Do not get your legal advice from your barber, your accountant, or even a constable.

8) Demand That Tenants Respect Their Payment Obligations. Refrain from listening to and buying your tenant's excuses for not paying rent. (Your mortgage holder will not listen to yours.) With tenants who have not been with you long (under six months or so) and whose credit is unproven, do not hesitate to serve them with a 14 day notice to quit the first time they are more than 5 days late with the rent. If they then pay, there is no harm done and you have established your formal tone. If they do not pay, you may begin eviction proceedings immediately and minimize your losses. Do not delay when your tenant is in default. You don't want to give them a chance of calling the board of health first- which now makes your subsequent notice to quit look retaliatory. Have a constable serve the notice to quit; this is the best way.

9) Protect Your Assets. Make sure you take measures for asset protection. Consider owning rental property in an LLC or corporation so that it is separate from other assets. If you have a mortgage on your property, will need to obtain your bank's approval. Also, visit with your insurance agent and/or attorney to review your insurance coverage. Do you have lead paint protection? Do you have mold protection? These are often in the form of additional riders only.

10) Rent Arrears Can Be Collected. With tenants who owe you money, as they are moving out, be sure to gather up all the identifying information you have on them (name, date of birth, social security number, bank name and account number, and also note the make, model, and license plate number of their car). All of this can be used to find their new residence and can be very helpful in satisfying the back rent owed).


THE MOVING PROCESS

According to the Holmes and Rahe stress scale, moving and changing residences is recognized as one of the most stressful life events. The website www.ehealthMD.com actually lists it in its top five most stressful life events. We've prepared this guide to help reduce your stress to the greatest extent possible and to help maximize your time and efforts. Please feel free to contact us at any time during this exciting and challenging time for you.

One to two months before the move.

  • Figure out what you're going to get rid of before the move, have a garage sale and/or donate your unwanted items to charity.
  • Get boxes and packing supplies. Boxes can be purchased at a local UPS, Fed Ex and your local Post Office locations. You can also use the internet to find boxes and packing supplies by simply typing 'moving boxes' and 'supplies' into a search engine. One other source is your local grocery or liquor store. If you go into your local grocery store or liquor store, they will either give you boxes they have left over, or set some aside for you after their next delivery.
  • Begin packing up things you do not anticipate needing until after the move such as collector items, antiques, photo albums, etc. Make sure each box is labeled with the room it will be going into in your new home. Put all valuable jewelry aside and take it with you on the move.
  • Put all important documents, such as closing documents, movers contract, wills, stock certificates, medical records and financial records, together and aside in a safe place.
  • Get firm quotes from at least three (3) moving companies. Consider purchasing movers insurance. There are four movers' insurance options. The first is Basic Value Protection- it does not cost you any money and the mover's maximum liability is generally $0.60 per pound per lost or damaged item. The second option is Depreciated Value Protection- this option usually costs between $0.0102-$0.017 times the total weight of your belongings and the mover will either repair any damage to your satisfaction or pay up to $2.00 for each pound of the total weight for lost or damaged items. The third option is Replacement Cost- this option usually costs between $0.0044 and $0.0073 times the total weight of your belongings and the mover will either repair any damage to your satisfaction or pay up the full declared value less a $300.00 deductible or $3.50 times the weight of your total shipment, whichever is greater. The last option is Full Replacement Cost- this option will cost you between $0.0062 and $0.0103 times the total weight of your belongings and the mover will either repair any damage to your satisfaction or pay full replacement cost with no deductible. After reviewing your options and comparing rates, reserve a moving company for the date of your anticipated closing.
  • Get familiar with your new community. Google your new city name or visit chamber of commerce to learn about restaurants, schools, clubs/organizations, etc. You may also use www.city-data.com or http://www.citytowninfo.com/places and type in your new city/town to get additional information.
  • Make sure your pets are up to date with all of their shots, many cities and towns will require proof of same. You should call the City/Town Clerk's office in your new city or town to find out their specific requirements.
  • If you are selling a home, you will need to call your local fire department to request an inspection so that you may obtain a smoke detector certificate and a carbon monoxide alarm certificate, which are required upon the sale of a home. The law requires that carbon monoxide detectors be installed on every level of the home and within 10 feet of each bedroom and habitable parts of attics and basements. There is a nominal charge for this inspection and if issued at the same time, only a single fee will be charged.
  • If you are renting, provide written notice of your intent to move to your landlord in the manner provided in any tenancy agreement.
  • If possible, take measurements of your new home to make sure that larger pieces of furniture will fit.

A couple of weeks before the move.

Utilities

  • Cable/Telephone/Internet
    You can transfer your service right online depending on who your service provider is (i.e. www.Directv.com, www.verizon.com, www.comcast.com, www.dishnetwork.com or www.rcn.com/boston) or Call ' Direct TV'1-800-531-5000, Verizon' 1-800-VERIZON (1-800-837-4966), Comcast'1-800-XFINITY (1-800-934-6489), Dish Network'1-855-318-0572 or RCN'1-800-746-4726.
  • Electric
    National Grid-or whoever your provider is, you can order new service or switch your current service by going to their website at www.nationalgridus.com or by calling them at 1-800-322-3223. NStar- you can order new service or switch your current service by going to their website at www.nstar.com or by calling them at 1-800-592-2000.
  • Gas
    National Grid- you can order new service or switch your current service by going to their website at www.nationalgridus.com or by calling them at 1-800-233-5325. NStar- you can order new service or switch your current service by going to their website at www.nstar.com or by calling them at 1-800-592-2000.
  • Propane/Oil
    You can search for local propane/oil companies by performing a Google search. You will want to compare prices. Once you have chosen a company, you will want to schedule delivery services for them to deliver to your home.
  • Trash Company
    If your new city/town has public garbage pickup, you will want to call the city/town clerk and find out the schedule, procedure and items allowed. You will also want to ask the clerk about recycling as it is mandatory in some cities and towns. If trash pickup is not serviced by your new city or town, you will need to find a private disposal company and schedule weekly pickups with them.
  • Water
    If your water supply is serviced by your new city or town, you will want to call them and tell them your name and date of closing so that they may change the account information over to your name as of the date of closing. Let each provider know the date of closing, where they should send you final bills, and the date you are moving into your new residence. Schedule your new installation(s) at your new home.

    If you are selling a home, you will need to call your local municipal water department to request that they read your water meter and issue you a bill 1-2 days before closing. You should pay the balance for these bills and bring the paid receipts with you at closing

  • Keep receipts related to moving expenses, many are tax deductible.
  • Register your children at their new school. Once you choose the school which your children will attend, call the school or see if they have a website and request an application package. Send in the application and have all of their records transferred to the new school.
  • Call your insurance agent and cancel the insurance on your home as of the date of closing. Set up insurance on your new home. Inform your auto insurance provider of your new address as find out what your new insurance rate will be based on where your new home is located.
  • Pick up a Change of Address form at the Post Office or go to www.usps.com/ccmove and follow the prompts to inform the Post Office of the date that you wish for your mail to start going to your new address.
  • Make a list of everyone you will need to notify of your change of address including creditors, the IRS, your bank, health providers and family and friends.
  • Change your address with the Registry of Motor Vehicles and/or Division of Motor Vehicles (DMV). You can go to http://www.massrmv.com/ if you live in MA to change it there for free or go to a nearby branch and fill out the form.
  • Cancel/Transfer landscaping service, pool service, alarm service, pest control, and/or snow plowing.

A week before the move.

  • Return any borrowed items to the library
  • Pick up any dry cleaning.
  • Cancel/Transfer newspaper delivery.
  • You may order or transfer a subscription by either visiting their websites or contacting them by phone at the phone number provided.
  • Transfer your medical records to your new doctor's office. You can do this by contacting your old doctor's office, giving them your new doctor's office and asking them to forward your records, or you may simply pick up the records yourself and deliver them to your new doctor's office.
  • Transfer any pet records to any new vet. You can do this by contacting your old vet's office, giving them your new vet's office and asking them to forward your records, or you may simply pick up the records yourself and deliver them to your new vet's office.
  • Transfer all prescriptions to a pharmacy near your new home. You can do this by contacting your new pharmacy and asking them to transfer your prescriptions from your old pharmacy. You will then provide them with the old pharmacy's phone number and they will take care of the rest. Be sure to give your physician your new pharmacy's contact information.
  • Finish packing the rest of your items, leaving out only what you anticipate you will need from now until a couple of days after closing.
  • Go through your closets, basement, attic and all other storage areas to ensure that you have not missed anything.
  • Drain your lawn mower, snow blower and power tools of all of their oil and gasoline for safety during the move.
  • Cancel automatic payments for your mortgage with your bank if you are selling a home. Set up automatic payments with your bank for your new mortgage payment, if applicable.
  • Breakdown outside furniture, playground equipment, gym equipment, bedroom sets, etc. Also disconnect your gas stove, washer, and dryer yourself. This will save the mover's time thereby saving you money.
  • If you are selling a home, estimate the oil level (or have your oil delivery company approximate it) and bring your most recent oil bill with you at closing so that the amount of oil in the tank can by multiplied by the latest price per gallon as shown on the statement and you can receive a credit from the buyer for the leftover oil.

A day before the move.

  • Pack a box of things you'll need as soon as you get to the house and take it with you in your car such as cleaning supplies, bathroom items, trash bags, disposable plates, cups, plastic ware, a first aid kit, paper towels, a hammer, screwdriver, a flashlight, a gallon of water, snacks, drinks and if applicable, baby food, diapers, and supplies.
  • Defrost, empty and completely clean the refrigerator.
  • Make sure your home is in 'broom swept' condition for your buyer/landlord.

The day of the move.

  • If there is snow on the ground, make a clean pathway from the truck to your home's door.
  • Be available to watch over and direct the movers. If you haven't paid the movers already, be sure to have cash on hand for the day of the move.
  • If you are a tenant, take photos of the condition of the apartment at the time of your vacating in case this is needed in any security deposit or related dispute with your landlord.
  • Do a final walk-through to insure that you are not leaving anything behind.
  • Lock all windows and doors and turn off all light switches.

After the move.

  • Go through the list you made before the move and notify everyone of your new address. You can notify them using email or postcards. Personalized postcards can be created, printed and sent to you for a nominal fee at www.vistaprint.com, and www.staples.com
  • Register your pet(s) with the city/town clerk's office.
  • Register for voting at your new town/city hall at the city/town clerk's office.

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