I bought a single family residence in February for $22,500.00 and sold it while in the process of remodeling it one week later for $59,000.00. The buyers put down $10,000.00 and I financed the remainder and began collecting payments in June. We closed in April and the remodel process continued until August when they took posession. I invested approximately $20,000.00. I have a full time job and the remodel was part time (weekends). How can I minimize the taxes I must pay and approximately how much will that be?
2007-09-29 03:36:48 · 4 answers · asked by jdh 3 in Business & Finance ➔ Renting & Real Estate
The net gain is taxed as ordinary income since you held it for one year or less. However as you have an installment sale this complicates things a fair bit as you now have to apportion between the gain and interest on the loan. I'd suggest you consult with a tax pro to get this right.
2007-09-29 03:46:53 · answer #1 · answered by Bostonian In MO 7 · 2⤊ 0⤋
Get a good tax advisor. Select a CPA or a tax attorney. You may be able to invest any profit in a 'like kind" property and avoid the tax consequences, or at least delay or diminish them. Be a good record-keeper. The IRS will want to see every bit of documentation of expenses that you can produce.
2007-09-29 14:00:31 · answer #2 · answered by Cheryl G 7 · 0⤊ 1⤋
Sweetie, you need to ask a tax advisor, not these Yahoo's! lol
But I'd say you will have taxes due on the income you made $36,500.
2007-09-29 12:40:02 · answer #3 · answered by Alterfemego 7 · 0⤊ 0⤋
You need to contact a CPA (certified public accountant), you're going to get all kind of wrong answers here on yahoo!!
2007-09-29 13:59:49 · answer #4 · answered by Shawna Marie 3 · 0⤊ 0⤋