How Much Will I Pay In Capital Gains Taxes When I Sell My Investment Property?


How Much Will I Pay In Capital Gains Taxes When I Sell My Investment Property?
By Scott Rogers • October 19, 2009
First, here's how to calculate your gain or loss on the sale of your investment property.... Selling Price - Purchase Price - Purchase Costs - Improvements - Selling Costs + Depreciation You may have heard of short-term and long-term capital gains --- the difference is in the timing.... If you sell an investment property within one year (including one year exactly) of purchasing it, your "short-term capital gain" will be taxed at the same level at which your ordinary income is taxed. This could be at a rate as high as 35%, but depends on your income level. If you sell an investment property after one year of owning it, your "long-term capital gain" will be taxed at either 0% or 15%. If you (as an investor) are in the 10% or 15% income tax bracket, you will pay 0% (yes, that's right, no taxes) on your long-term capital gains. If your income tax bracket is above 15%, you will still only pay 15% tax on your long-term capital gain. This is important to note, as an investor might pay a 25% tax on their ordinary income, but can pay significantly less (only 15%) on their income (long-term capital gains) on investment properties in that year. Of note, these tax rates (0%, 15%) only last through the end of 2010 given current legislation on the books. If they aren't extended, they will revert back to the previous tax rates of 10% and 20%. Receive Updates by Email Recent Articles: There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell Consider The Cost Of Your Planned Renovations When Planning Your Offer
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 21, 2024 (unless otherwise noted).
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