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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I September 2009 my wife and I purchased an RV Lot at an RV

Resolved Question:

I September 2009 my wife and I purchased an RV Lot at an RV Resort in Aguanga, CA. We paid $20,000.00 in cash. we spent $1,100.00 in closing cost, and an additional $7,532.00 for improvements on the lot. Total expenditure $28,632.00. Now we are selling the RV lot for $33,600.00, with an estimated net profit of $13,600.00.
My questions are
1. On what amount would we have to pay a Capital Gain Tax?
2. Do we have to pay CGT both to the Fed. and State?
3. What is the % of the CGT FOR EACH
Your response would be greatly appreciated.
Armando Vega
Email:[email protected]
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.

LEV :

Hi and welcome to Just Answer!
1. On what amount would we have to pay a Capital Gain Tax?
Your basis is your purchase price adjusted by other expenses $28,632.
Your capital gain = $33,600 - $28,632. - (selling expenses)
Because you owned the property more than a year - that will be long term capital gain taxable at reduced rate - not more than 15%
2. Do we have to pay CGT both to the Fed. and State?
Yes - your capital gain is subject of both federal and state income taxes.
3. What is the % of the CGT FOR EACH
long term capital gain rate is 15%.
For California - there is special rate - teh tax rate depends on your total income and may be between 1% and 9,3%

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