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I have a Vacation property in Michigan I have owned since…

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I have a Vacation...

I have a Vacation property in Michigan I have owned since 1977 I would like to sell to buy another in Florida, , I will get 100K , I will net 50K my net income for last year 2016 was 10K what are my capital gaines

Submitted: 4 months ago.Category: Tax
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11/26/2017
Tax Professional: emc011075, Tax adviser replied 4 months ago
emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 3,587
Experience: IRS licensed Enrolled Agent and tax instructor
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Hi. My name is ***** ***** I will be happy to help you.

How long have you been renting it? How much did you pay for it?

Your capital gains will be difference between difference between your cost basis and sales price. Your cost basis is your purchase price + improvements - annual depreciation.

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Tax Professional: Barbara, Enrolled Agent replied 4 months ago
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 5,784
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Different expert here – my name is ***** ***** please allow me to provide you with additional information you will find helpful.

Your initial question mentioned the property was a VACATION home, not a RENTAL PROPERTY.

If the property is not a rental, there is NO depreciation that enters into the equation.

You will pay capital gains tax on the DIFFERENCE between your basis (what you paid when you purchased the property), plus closing costs in connection with your purchase, plus any improvements you made to the property and the sales price (minus any closing costs).

For example, if you purchased the property for $50,000, made improvements of $5,000, and paid closing costs of $2,000, your basis would be $57,000. If you then sell the property for $100,000 and have $5,000 in closing costs, you will pay capital gains tax on $38,000 (the difference between $95,000 and $57,000).

To give you an idea, the 2017 capital gains tax rates can be found at the following link:

https://www.fool.com/retirement/2016/12/11/long-term-capital-gains-tax-rates-in-2017.aspx

Please let me know if I can assist you further.

Thank you and best regards,

Barb

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Tax Professional: Barbara, Enrolled Agent replied 4 months ago

Just following up with you to see if you have any other questions. If so, please let me know so I can continue to assist you.

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