Reducing Your Tax Load: Minimizing Taxable Capital Gains

[lti12]

asa

[lti12]

I got a question, can someone help me out please. If I build a home and lets say it cost me $150,000 to build it, and then I sell it for $200,000. The 15% capital gain tax I pay, would that be of the $50,000 profit I got? Which is $7,500 tax after sale. Or is my capital gain tax going to be from $200,000, the sale of the house. Which I will have to pay $30,000 in taxes, and only take $20,000 profit. Also the %15 capital gain tax is that all across the USA, or is it different from state to state?

[taxtips]

Hi there

Your property is considered as a capital property.Thus shall be treated as a capital gain.Proceeds $200,000.Cost $150,000.Thus capital gain of $50,000.Taxed, as usual.

However, if certain ownership conditions are met-owned,lived in the home for minimum 2 years, etc, then the gain may qualify for the $250,000 maximum exclusion. This must be reviewed carefully to ensure all the conditions met.

Capital tax applies equally across the nation, federally.

James Kromida, CA, CPA

[lti12]

So I would have to pay $7,500 capital gain tax when I sell the property? That would be 15% from $50,000

[lti12]

I am familiar with waiting 2 years before selling the house then you wont pay capital gain tax, but I don't want to wait

[timothytzanakos]

Quite impressed! ... very informative

[photovideopro]

Excellent video. Very useful tax saving information on reducing capital gains tax that is easy to understand.