Im selling my condo after I bought it 12 months ago. Capital Gains tax?

Question

I bought my condo in March 2006...selling it this year. Been in it almost 12 months. I cant afford the payments. I bought condo for $99,900. Im selling for $109,900. Im not making much profit. Im breaking even since I have to pay closing costs. How much will I have to pay in capital gains tax since it is under 2 years? Im in florida.

Answer 1

Get your receipts together. Did you improve the property with new appliances or flooring? What about your closing costs? These can be used to reduce your gain. You need to live in the condo for 2 years in order to qualify for the $250,000 exclusion from capital gains tax.

Answer 2

Hard to tell how much you'd have to pay. The whole $10,000 won't be taxed - you can deduct items like realtor's commissions which will probably take care of a lot of the gain. If you have owned it for more that a year when you sell it, you would pay long term capital gains tax on the gain, which would be less than the ordinary income rate you'll pay if you sell it when you've owned it for a year or less.

Answer 3

Hold out until you've owned it for a year! The tax rate will drop. It will be a long-term capital gain if you wait for a year and the rate will be a flat 15%. If you hold it less than one year (even one day shy of a year!) it will be taxed at your marginal rate.

Some of your closing costs can be used to reduce the gain. Sales commissions, closing agent's fees, etc. all will reduce the gain. If you are paying any of the buyer's pre-paid items, those cannot be used to reduce the gain. After the typical sales commissions and costs, you might have a couple thousand in taxable gain at most.

Answer 4

In this case, because the property hasn't been your primary residence for two years, the minimum required to qualify for the existing capital gains exclusion of $250,000 (if single, twice that if married), the entire sum of whatever your net gain, if anything, falls into the category of taxable income.

Since it is now February, and you say you are "selling" (as opposed to "have sold"), it isn't clear from your description that you have actually closed on the property, but generally, capital gains fall into two categories: short term and long term, the threshold being one year. As an incentive to invest, long-term gains are currently treated advantageously (vis-a-vis effective tax rates) vs short term gains.

Answer 5

If you bought it for $99K and sold it for $110K then you have little or no capital gains to report. Add the cost of purchase to the $99K, such as appraisal fees that you paid. Add any improvements you made to the condo to the $99K as well. Subtract the sales commissions you paid from the $110K.

If there is still a gain to report, it will be short-term capital gain reported on Schedule D and taxed as ordinary income.

Answer 6

In alot of States if you live in the dwelling for a years and it is the first time you have sold property then your exempt from capital
gains tax.I'm not sure about Florida so you should check with your Attorney before closing,you may be only a month or so away
from saving money.
Good Luck.

Answer 7

Younwould have to pay the short term cap gains tax which is equal to your nominal tax rate. You may not have to claim the gain if your realtor does not file a 1099. Also, consider selling it for what you paid. that way there is no gain. Good luck.

Answer 8

no, your presumption is incorrect. u have to pay tax on the short term capital gains( provided your total income for the year in more than rs 1,10,000 including short term capital gains ). no exemptions of any kind available.