Capital Gains Taxes On Rehab Sale

I bought a house to rehab for $71K. ($54K mortgage) My estimated total I'll have invested between repair and holding cost in 6 months will be around $85K. It should sell for about $115K.. Do I have to pay capital gains on the difference between $115 and $71K or can I deduct the repair cost from my gains?

Comments(1)

  • MaksimUSA17th September, 2004

    You will, of course, pay the tax off of your TRUE profit, which in this case will be $30k if I understand your post correctly.
    ($115k-$85k).
    You also need to subtract about 7k if you plan to use a realtor to sell the property.
    Mark.

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