Posted by Dave Murray, Ohio CPA on August 27, 2003 at 07:06:38:
After re-reading my post, I see I have a typo. LTCG rate for the lowest brackets is 5%, not 10%.
Capital Gains Tax?? - Posted by TM - CALIF
Posted by TM - CALIF on August 18, 2003 at 21:21:27:
Can someone explain to me how the capital gains tax applies. We have a condo we bought a year ago, and are considering selling now, but someone told us we will have to pay a min. of 28% tax because we owned it less than 2 years?
Is this correct, and if so, is there any way around that? Is the tax taken at the time of sale or can it be deferred?
Any info would be greatly appreciated in helping us to decide what direction to go.
Re: Capital Gains Tax?? - Posted by William L. Exeter
Posted by William L. Exeter on August 19, 2003 at 12:17:56:
Someone has given you incorrect advice, and Dave Murray is right on the money. The exclusion from income if it is your personal residence falls under Section 121 of the Internal Revenue Code and if you have held the condo as income producing or investment property you can defer the gain pursuant to Section 1031 of the Internal Revenue Code.
Let us know if you have any further questions.
Bill Exeter
Diversified Exchange Corporation
Re: Capital Gains Tax?? - Posted by Dave Murray, Ohio CPA
Posted by Dave Murray, Ohio CPA on August 19, 2003 at 10:37:02:
If you own it a year and a day and sell it, you will pay tax of 15% on the gain (perhaps 8% if you are in the very lowest bracket). If it was your personal residence and you sell because of job relocation, health, or “unforeseen circumstances”, you may be able to exclude a portion of the gain. If it was not used as your personal residence, the only was to defer tax on the gain is to use a Sec. 1031 tax-deferred transfer which requires the use of a qualified intermediary. And as far as timing, if you sell now, tax on the gain would need to be paid by next April 15. The IRS site (www.IRS.gov) has lots of good info about this; check it out.
Re: Capital Gains Tax?? - Posted by SP
Posted by SP on September 21, 2003 at 08:56:24:
I have been living in my home for 1.5 years and am relocating, but with the same company. As this is work related relocation, do I still need to pay Capitl Gains tax on my home?
Re: Capital Gains Tax?? - Posted by Dan C (MI)
Posted by Dan C (MI) on August 22, 2003 at 18:43:28:
Dave,
Can you explain the Long Term Capital Gain tax for an investment property? It seems like that is a straight 20% tax from what I could get out of the IRS site. It doesn’t seem to be related to your tax bracket.
Maybe I am not looking in the right spot…
Thanks,
Dan
Re: Capital Gains Tax?? - Posted by Dave Murray, Ohio CPA
Posted by Dave Murray, Ohio CPA on August 26, 2003 at 08:46:51:
New legislation has reduced the rates you mention. Long Term Capital Gains for sales after 5/3/03 are now taxed at a maximum 15%. Also, The rate for Long Term Capital Gains is always lower than your ordinary tax rate. Thus, if you are in the lowest brackets (10% or 15%), LTCG tax rate is 10%. Finally, be aware that depreciation is still recaptured at 25%. I hope this helps.