For example, if I invested $100,000 and my profit is $10,000, totaling $110,000. Does IRS look at $100,000, $10,000, or $110,000 for tax deduction?
How much will they take out? 35%? I live in Texas.
Thanks!
2007-08-13 03:33:34 · 2 answers · asked by Magnix2k 3 in Business & Finance ➔ Taxes ➔ United States
Tax deduction? You mean taxable INCOME.
The taxable income is whatever profit you make, and is shown in the year of the sale. On the schedule D you actually show all of the numbers in your example - you only are taxed on the profit, though.
2007-08-13 06:20:29 · answer #1 · answered by Judy 7 · 1⤊ 0⤋
One sure tip off is that your numbers all end in a zero (0). Particularly when it comes to deductions it is a sure audit if all of the expenses on your rental house happen to end in zero and you had a big loss.
2007-08-13 10:45:03 · answer #2 · answered by ? 6 · 0⤊ 1⤋