Question

Discuss why investors purchase a house with a SELLERS agent, instead of a BUYERS agent. Also, Discuss why investors to do know how investing impacts (both positively and negatively) their personal taxes.

Answer 1

Investors in an effort to locate a suitable house especially in a tight market tend to go with the seller’s agent because going with a seller’s agent has the possibility that the agent will give importance to the bid posted by the buyer as it is in the agent’s interest to maximum incentive for the house and get the maximum selling price. Thus it is possible that the investor who has bid may get the house as his bid got interest from the seller’s agent.

Investing in equity or bond instrument can lead to tax liability, as the interest income from the bond instrument is taxable. Also any stock when sold after the holding period may be liable for payment of capital gains taxes and this may create additional liability.

Similarly few investment in some of the notified pension plans are tax exempted and all the contributions made to these pension plans are deducted from the net income for calculation of tax liability.