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I am going to sell my house that I have not lived in? What…

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I am going to...

I am going to sell my house that I have not lived in? What type of taxes will have to pay on the profit?

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Submitted: 10 months ago.Category: Tax
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Answered in 5 minutes by:
9/26/2017
Tax Professional: Lev, Tax Advisor replied 10 months ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,338
Experience: Taxes, Immigration, Labor Relations
Verified

The gain - not the total proceeds - will be subject to income tax.

So the first step is to determine the gain which is calculated as

(selling price) MINUS (adjusted basis) MINUS (selling expenses).

The basis is actually your purchase price.

That basis is adjusted by improvements and some other items depending how the property was used.

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Tax Professional: Lev, Tax Advisor replied 10 months ago

If the property was inherited - the basis is the fair market value at the time the decedent passed away.

THAT gain will be added to your other taxable income.

If the property was owned more than a year - the gain will be long term capital gain - taxed at reduced rates - in most situations not more than 15%.

Let me know if you need any help with reporting.

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