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I purchased an investment property for $55,000 in 7/10. I

I purchased an investment property...
I purchased an investment property for $55,000 in 7/10. I am selling the property on 1/14/11 for $85,000. Will I be taxed on capital gains or ordinary income? What is the difference in cost to me? Thank you.
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Answered in 12 minutes by:
1/1/2011
Richard
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 55,791
Experience: 29 years of experience as a tax, real estate, and business attorney.
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Good morning. Because you have not held the property for 12 months, any gain will be capital gain, but short term, not long term. Short term capital gain is taxed at ordinary income tax rate. Had it been long term, your capital gain tax rate would be 0% if you are in the 10% or 15% marginal income tax bracket, or otherwise 15%. On the furnishings, your gain or loss will be the $25,500 less what you paid for it.

 

 

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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.

Richard
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 55,791
Experience: 29 years of experience as a tax, real estate, and business attorney.
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