Posted by Daryl-WI on February 08, 2000 at 12:33:49:
Can you explaing why it is considered income instead on cap gains?
Is it related to the time the property is held, or ?
I should make $18,450 Next week @ closing…Do I have to pay CAPITAL GAIN??? - Posted by Tony James
Posted by Tony James on February 07, 2000 at 19:06:57:
$75,000 FMV / Purchase Prices
$63,450 (from 10% down, 5% Carry Back, 94% of note)
-$45,000 Owed
$18,450 Seller (which is me)
My question is… at the closing…do I pay taxes on the $18,450 right then and there at the closing? And how much taxes am I looking at? Is there a way to delay the payment so I may reinvest it?
www.irs.ustreas.gov (this site might help) - Posted by SusanL.–FL
Posted by SusanL.–FL on February 08, 2000 at 14:50:38:
Do a search under “capital gains tax”.
You might be wise to sock some of that $profit$ away somewhere so that you’ll be covered when it comes time to paying the taxes on your capital gains (or ‘income’–whichever it turns out to be).
Just a thought!
Re: I should make $18,450 Next week @ closing…Do I have to pay CAPITAL GAIN??? - Posted by Judy
Posted by Judy on February 08, 2000 at 09:27:54:
Tony,
GET A GOOD ACCOUNTANT.
You will have to pay an estimated tax within the next three months on the income you have made. If you don’t pay the estimated tax, there’ll be penalties(ouch)!
Judy
re: capital gains - Posted by Potash
Posted by Potash on February 07, 2000 at 22:16:15:
You have so many omissions and errors in you post, I dont even know where to begin an answer.
It looks like its more than that !!! - Posted by Mark-NC
Posted by Mark-NC on February 07, 2000 at 20:12:21:
Tony,
You don’t have to pay on taxes unitll you file next year for this years taxes unless you want to pay quarterly estimated taxes… But to answer your question. No they do not take the taxes out at closing.
I think you have your figures a little crossed.
You have a second mortgage in your equasion. That would equal 110%.
This is how I see it.
sales price $75,000
90%LTV note = $67,500
Note sold at 94% = $63,450
10% down = $7,500
That puts $70,950 0n the table
You owe the seller $45,000.
Unless I am mistaken, It looks to me like you are going to make $25,950 not $18,450.
Thats a good mistake.
Mark
The tax rate on a long-term capital gain is 20%. - Posted by SusanL.–FL
Posted by SusanL.–FL on February 09, 2000 at 09:25:11:
Last year the rate was ameneded from 28%.
c-ya!
Re: I should make $18,450 Next week @ closing…Do I have to pay CAPITAL GAIN??? - Posted by Bud Branstetter
Posted by Bud Branstetter on February 09, 2000 at 01:07:38:
To be specific there may be penalties. There may not if more is deducted than the year before; along with a miriad of other caveats. The advice to get professional advice is correct.
What would my Taxes be on the sale next year? - Posted by Tony James
Posted by Tony James on February 07, 2000 at 21:33:03:
If I make $25,950 from a sale, WHat will I pay next year?
Re: What would my Taxes be on the sale next year? - Posted by Mark-NC
Posted by Mark-NC on February 07, 2000 at 22:06:29:
As an addition to what Jeffrey said. It is not considerd capitol Gains on a Flip it is considerd income so it is taxed the same as income.
Like Jeffrey said you will have to take all your other income and deductions into consideration to know exactly what it would be.
Mark
Re: What would my Taxes be on the sale next year? - Posted by Jeffrey Short
Posted by Jeffrey Short on February 07, 2000 at 21:43:46:
Hard question to answer…
After all, is this the only deal that you are going to do? How much expenses does your business have? Do you have a full-time job… what about other investments? etc… etc…
There are many factors to determine how much tax you will pay. To approximate - take your 1999 tax situation… add this deal…and see what it computes to. Its not perfect…but its close.