Purchased for $10,000 in 2006
Selling for $47,000 in 2007
No improvements to property
5 Acres
Own home on separate piece of property
2007-03-19 11:50:08 · 5 answers · asked by Jay Z 1 in Business & Finance ➔ Taxes ➔ United States
You have a capital gain of $37,000. try to hold on to it for at least one year so that it will be considered long-term gain. If you sell the property in under one year, it will be considered a short-term gain. Short-term capital gains are taxed at ordinary rates, while long-term capital gains are taxed at lower rates (either 5% or 15%).
If you happen to be a lower tax bracket next year, i.e. 10% or 15%, then your capital gain will not be taxed at all in 2008. So in this case you would definitely want to postpone the sale.
If you are selling the property in 2007, perhaps you have unrealized losses in your stock portfolio that you can realize and help offset the gain.
2007-03-19 17:12:56 · answer #1 · answered by tma 6 · 0⤊ 0⤋
If you sale date is at later in 2007 that your purchase date is in 2006, you have a long term capital gain of $37,000 less the cost of selling the land. If you sell less than 12 months after purchase, you have a short term capital gain of the same amount. Short term gains are taxed as regular income, long term gains are taxed at a lower rate. In either case, you gain is shown on Schedule D along with any other capital gains or losses.
2007-03-19 19:37:48 · answer #2 · answered by STEVEN F 7 · 2⤊ 2⤋
I hate you.
People like you is why I can't afford to buy a house for myself.
I think that is pure greed. Even if the value went up that much, I couldn't get myself to sell it for that much, I would give someone who is having a hard time a good deal on it.
Yeah, maybe I'm just not cut out to be a "well off" person.
About the taxes, well you have to pay taxes on the gains which is 37k.
2007-03-19 19:12:41 · answer #3 · answered by Anonymous · 0⤊ 2⤋
You'll pay long term capital gains tax on $37,000. If you pay a realtor's commission, you'd be able to subtract that from the gain.
2007-03-19 19:27:44 · answer #4 · answered by Judy 7 · 3⤊ 2⤋
Damn, did it have a mine on it or something?
37k capitol gains tax, no way to avoid any of it, but who cares.
Congrats on a really GREAT investement!
2007-03-19 18:53:44 · answer #5 · answered by Anonymous · 0⤊ 3⤋