Have Tax Questions? Ask a Tax Expert for Answers ASAP
Good morning. Your capital gain is $800,000 less $500,000. Your credit card debt is not relevant to the computation of gain because it is not part of your basis and it does not reduce your sale price. So, you have a capital gain of $300,000. You can use the $250,000 capital gain exclusion ($500,000 if you are married).
I hope this has given you the guidance you were seeking. I wish you the best of luck!
If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break.
If I have adequately answered your question, even though the answer might not have been the one for which you hoped, I would appreciate it if you would please click the GREEN ACCEPT button so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.
If you need additional clarification on this question after clicking ACCEPT, please do not hesitate to click Reply and I will be happy to do what I can to help you further. Thanks for allowing me to be of service to you.
The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.
The creditor I was referring to is not a credit card creditor, it is actually someone who has taken a 2nd trust deed out on the property, with the total amount being close to $200,000.
Would paying off that debt be deducted from the Capital Gains tax? If not, what would be deducted exactly?