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Capital gains anyone??

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  • skyqueen skyqueen's Avatar 05-18-07 | 01:15 PM
  • hmm,, I can't remember for sure - they have changed the capitol gains rules about 4-5 years ago and they were/are much more lax than they were. But I can't recall the specifics.
     

    let me see if I can find some info on it quickly.
  • skyqueen skyqueen's Avatar 05-18-07 | 01:19 PM
  • I should also say that I know that the laws for an investment property are different than the owner occupied properties....

    this is a good Q&A article

     

    it helps a little.
  • skyqueen skyqueen's Avatar 05-18-07 | 01:26 PM
  • okay - and to complicate your matter....

    because you bought property at a certain price, then spent $ to add a house on it (which you will then sell) is extra complicated.

     


    this starts to explain how there is a tax basis
    Quote
    have investment property. Can you explain the term basis of assets?

    Basis is your investment in property for tax purposes. The difference between the selling price of your assets and your basis determines whether there is a taxable gain or loss on the disposition of your property. You need to determine your basis to figure allowable depreciation deductions as well. Your original basis is usually your cost to acquire the asset. Your adjusted basis (which is the basis you use to determine gain or loss or depreciation amounts) is the result of increasing or decreasing your original basis according to certain events.
    so as I understand this, your basis would be the cost of the land, + the cost of the house you built.
    then the tax basis will be the difference between your total costs and your sale price. but there are other things on the FAQ sheet that will point you to the answers.

     
  • tryinfr3rd tryinfr3rd's Avatar 05-18-07 | 01:30 PM
  • hmmmm....I didnt realize it would have to be held in a trust, Im thinking even if we did still qualify (if we didnt have to declare it before we bought the property) we probably dont wanna go that route....thanks Karen!! But it sucks we will have to pay thousands in CG!!
     
    dang taxes!!
     


    *yeah Ive been keeping DETAILED receipts for everything we've spent on this place and Ive got them all organized by month and wrote what it was for on the receipt and etc so hopefully that will help in the end
     

     

    Last edited by tryinfr3rd; 05-18-07 at 01:35 PM..

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