Posted by John Corey on April 17, 2006 at 23:04:58:
BT,
You will need to do a lot more reading to really understand the fine points.
The high level is you buy a property, pay some fees and closing costs, put money into repairs and then sell with associated closing costs. All the money into the property raises the bar before you will see a profit. You are taxed on the profit.
If you were holding the property as a rental for a year or more then you would be able to depreciate the property and write off the other operating expenses (advertising, property management costs, etc). You would also have to capitalize any improvement (new roof being an example) vs. writing off repairs (fixing a broken window).
Appliances and other things you put into the property have to be dealt with on your tax return.
The simple version is you are taxed on your profits. The real truth requires a few books and a competent tax adviser.
John Corey