Where Does The CG Tax Come In, On The Sale Price Of Property Or On The Profit?
Are you taxed on sale price of a property or are you taxed on the profit you make off the property? Also, if you use a realtor to sell your property, are you taxed before or after you pay realtor commissions?
thanks everyone
quinn
My tax preparer tells me that my capital gains tax is computed only on my net profit, that is profit after all expenses of sale have been paid to include some closing costs along with the sales commission.
CG tax is on your net. If you keep good records you may be able to charge a lot of things as expenses. Yes, brokerage commisions on the sale, the interest on the loan that you paid during the period you held it (if you have not already deducted it). Your traveling expenses to and from the property during the time you managed it. The unamortized portion of any loan origination costs from the time when you purchased it. Dinner for the buyer where you discussed the sale. Dinners for potential buyers. etc. etc. etc. All the materials you bought to fix the place up. Unfortunately you cannot deduct your own time for making those repairs but if you hire labor you may deduct that labor. Even if you hire your kids (with complicated restrictions I will not atttempt to go into here. All of these are deductable expenses.