Capital Gains Taxes On Rehab Sale
I bought a house to rehab for $71K. ($54K mortgage) My estimated total I'll have invested between repair and holding cost in 6 months will be around $85K. It should sell for about $115K.. Do I have to pay capital gains on the difference between $115 and $71K or can I deduct the repair cost from my gains?
You will, of course, pay the tax off of your TRUE profit, which in this case will be $30k if I understand your post correctly.
($115k-$85k).
You also need to subtract about 7k if you plan to use a realtor to sell the property.
Mark.