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Richard
Richard, Tax Attorney
Category: Capital Gains and Losses
Satisfied Customers: 54344
Experience:  29 years of experience as a tax, real estate, and business attorney.
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Totally post on this. I put my children on deed of rental

Customer Question

Totally post on this. I put my children on deed of rental property. Which I rented thru an s Corp . Pretty much lost mone or broke even every year. Value of unused up over 20 years. What are kids facing in terms of cap gains?
Submitted: 10 months ago.
Category: Capital Gains and Losses
Expert:  Richard replied 10 months ago.

Good morning. My name is ***** ***** I look forward to helping you.

Can you provide me a bit more information? In what state is the property located. What is the value of your property? What is the basis of the property? Thanks.

Customer: replied 10 months ago.
Hey Richad
New York. Purchased in 1995 price 185k renovations 100k comps selling for 700 to 800k
. What do you mean by basis?
Expert:  Richard replied 10 months ago.

Basis is your purchase price plus the cost of renovations reduced by depreciation. Gain is then your sales price (less closing costs) in excess of your basis. New York has a capital gain tax rate of 8.8%.

The Federal tax laws concerning taxation of long term capital gains are as follows:

0% applies to long-term gains and dividend income if a person is in the 10% and 15% tax brackets,
15% applies to long-term gains and dividend income if a person is in the 25%, 28%, 33%, or 35% tax brackets, and
20% applies to long-term gains and dividend income if a person is in the 39.6% tax bracket.

In addition, starting in 2013, capital gain income became subject to an additional 3.8% Medicare tax for taxpayers with income at or above a certain threshold. This 3.8% Medicare surtax applies to taxpayers with “net investment income” in excess of threshold income amounts of $200,000 for single filers and $250,000 for married couples filing jointly.

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