Re: Attn: Tim Fierro - Posted by E.Eka
Posted by E.Eka on October 09, 2003 at 09:09:07:
Without getting into specifics, because I don’t have the time to research it, that amount of tax is really high on $25k-$30K, it can’t be just capital gains. Phil made a good point. There is an issue of depreciation recapture…I think it’s section 1050 in the code, where some of that depreciation that the seller took in those 2 yrs would have to be recognized as income. The $10K is a leasehold improvement is is capitalized to the house, which Phil stated as well.
Off the top of my head I can’t tell you more. I’d need ALL the specific as well as how her accountant came to the numbers he has.
It would qualify for long term capital gains because it was held for long term, longer than a year and because it’s not a flip.
Hopefully Blane won’t jump all over me on this one…just joking…ha ha!