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Megan C
Megan C , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16539
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I have received $220,00 profit from a construction contract.

Customer Question

I have received $220,00 profit from a construction contract. I plan on buying a home in cash soon for the same amount with this money. Do I need to pay taxes on this money.
Submitted: 2 years ago.
Category: Finance
Expert:  Megan C replied 2 years ago.

Megan C :

Thank you for your question, and thanks for using JustAnswer.com. Yes, you will need to pay tax on the funds from the construction contract

Megan C :

You cannot deduct the cost of purchasing your home, or defer taxes because of this.

Megan C :

So, you will pay tax on the construction contract profits

JACUSTOMER-su21ufbk- :

What rat of tax would I pay

Megan C :

What is your other income, and do you file as single, head of household, or a married filing joint return?

JACUSTOMER-su21ufbk- :

Married filing jointly. Spouse is a teacher receiving $30,000 annually

Megan C :

So you have $250,000 of joint income that year?

JACUSTOMER-su21ufbk- :

More like $320,000

Megan C :

You will be in the 33% tax bracket

Megan C :

OK you will be in the 33% tax bracket

Megan C :

so 33%

JACUSTOMER-su21ufbk- :

Is there any tax break for buying a house

Megan C :

No, there is not

Megan C :

Only tax benefits of home ownership are that you can deduct mortgage interest and real estate taxes if you itemize, and when you sell the house at a gain you can exclude a portion of that gain

Megan C :

Do you have any further questions about this matter

Megan C :

If you have no further questions about this matter, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today

Expert:  Megan C replied 2 years ago.
Thanks for allowing me the opportunity to help you. Please let me know if I can be of any further assistance to you in this matter. I really enjoyed working with you – please feel free to request me again when you come back to ask another question. Simply enter "MyVirtualCPA" in the subject of your question Thanks again for being a JustAnswer customer