Capital Gains Tax
I just purchased a home last month. I have had some major problems with it already & had them fixed, however I am soured on the property and no longer want to live there. I really want to sell it, especially since I am worried about making the payments since these repair costs were incurred. Should I try to sell it..would the capital gains tax kill me? I live in Oregon.
I used to right business plans to support myself through college. Your question is way too broad to be answered in a forum like this.
The first question you need to answer is why are you writing this plan? Is it for investors? Bankers? Partners?
Depending on who you are writing it for will guide how it is written.
Here is the basic setup of a business plan:
I) Front Matter (Table of Contents, Cover Page, etc.)
II) Executive Summary (This is the last part you write and should be less than one page).
III) Company Plan (The basics, who you are, goals, everything about the company)
IV) Marketing Plan (How will you sell your product)
V) Financial Plans (Historical and Projected Data)
VI) Appendixes (Supporting Docs like previous tax returns, resumes of key individuals, etc.)
As an REI, you may be able to put the marketing plan in the company plan.
My best advice: Go to the library and learn how to write a business plan in general. Write the business plan according to the books. Then keep working on it. It will look awkward to start.
Where most people make the mistake in writing their BP is that they think they will write it once and be done with it. A BP should be a living document. Constantly updated. Constantly revised.
Post a specific question if you have one.
More than likely, you will need to pay short-term capital gains (currently pegged at your current income tax rate) and SS.
Quote:More than likely, you will need to pay short-term capital gains (currently pegged at your current income tax rate) and SS.joecrane,
If SS stands for Social Security, you are misinformed. There is no social security tax on investment income.
Brownbuttons.
The real question to ask is how much profit on the sale do you expect. After only one month of ownership, do you really have enough appreciation that you will show a profit after paying your selling expenses?
Remember, it is not your sale price that is taxed, it is the net profit from the sale that is taxed.
NewKid
From his post, it sounded like a flip. It was kind of vague hence the wording "More than likely" to start the sentence.
If he is flipping, then this is a dealer disposition and he is liable for the SS tax. If it is an investement property, then you are correct.
More details from the poster would be nice.
1031 is the way to go, till u accumulate enough to by a multi unit to hold onto, shot for a size goal, 4-plex, or a 10 unit developement, that way you can hold onto it and make money without worrying about paying capital gains.
While 1031 exchange does defer capital gains taxes, your primary residence does not qualify to participate in a 1031 exchange.
I agree with NewKidd. It sounds like it is a primary residence and the 1031 exchange would not apply and the 121 exclusion would not apply due to the short-term holding period.
[addsig]
After reading the original post and all the responses, everyone could be right. The poster did not provide enough details.
Thanks for the suggestion. Do you happen to know if the loan doc fees I paid to the broker are refundable since there is no deal now to close?
Thanks
Sorry to hear about that, it is the bad ones that make us all look bad. What did they call the fees they charged you? They are right about the cost of lots in Lehigh.
[addsig]
To be fair to Advantage Builders, I think the mortgage company painted them to be more involved in the problem than they really were. I contacted the builder, & he explained the lot was not his as we were originally told. He also said there had been a price increase with the expiration date that we never knew about either. So this has been quite a little lesson. Thanks for listening to me vent.
Looking for a good lawyer? Try the cemetary. Just kidding.
Good Afternoon-
If and when you find a buisness plan please share I am in the same boat-good luck and keep me posted