Filing For Capital Gains

Comments(8)

• 
  DaveT17th September, 2003

  Yes, you are solely responsible for the accuracy of your tax return.
  
  The forms you would use to report your profits depend upon your business entity and your holding period.
  
  Call the IRS assistance line and discuss your questions with them. It's free.
  
  If you don't have a bookkeeping system in place, perhaps you need to engage a CPA to help you set up an accounting system. Once set up, you can manage the accounts yourself, and the CPA can help you file your tax returns at the end of the year.

• 
  jllaco17th September, 2003

  Thanks for the response. I have only purchased and sold two house this year. I have kept track of all expenses so it should not be that difficult to put it all together.
  
  Thanks again.

• 
  DaveT18th September, 2003

  I assume you are referring to property flips when you say you only bought and sold two houses this year.
  
  If so, then your profits are active income -- not capital gains -- so you will not use Schedule D as you may have expected. Instead, report your income and expenses on Schedule C as a sole proprietor.
  
  Consult the IRS 1-800 assistance line for specific details.

• 
  jllaco18th September, 2003

  Dave, So I will not be taxed at CG rate, rather it will be where my income falls? Is that usually higher or lower than paying Capital gains?

• 
  TheFox18th September, 2003

  Quote:
  On 2003-09-18 09:14, jllaco wrote:
  Dave, So I will not be taxed at CG rate, rather it will be where my income falls? Is that usually higher or lower than paying Capital gains?
  
  
  Yes! That's one of the reasons investors should think about their business structure when getting involved in REI. The new(er) article on different organization types is a good place to start.

• 
  DaveT18th September, 2003

  Quote:So I will not be taxed at CG rate, rather it will be where my income falls? Is that usually higher or lower than paying Capital gains?Your tax rate will be the same as your ordinary tax rate -- the same as the rate for short term capital gains

• 
  jllaco18th September, 2003

  witth out going to the tax tables, roughly what percentage is the average tax rate. I know it is different for different incomes, but I am just looking for a rough number.
  
  Thanks

• 
  DaveT19th September, 2003

  I would guess that the majority of taxpayers fall into the 25% tax bracket. But, this is only a guess. If you want to know what your tax bracket is, you will have to go to the tax rate schedules (not the tables) published in IRS Publication 17.