Yes, you need to pay taxes on profit. But you need to talk to an accountant to see how much counts as profit in your situation. A large part of this depends on how you arranged the transaction and if you are using the profits to buy another property.
Profit is what is left after the expenses. How the deal is structured can change what the IRS would consider valid expenses/deductions. A good accountant can help you locate all of the valid expenses and possibly give you advice on how to structure future transactions so as to limit your tax liability. Also you may not need to pay capital gains on the profit if you use it to purchase another property. (This is subject to certain rules.) There are also rules on income from loans versus income from rents or sale of property.
For any more detail for your situation contact an accountant in your area. For any more questions of a general type I may still be able to help.
Yes, you need to pay taxes on profit. But you need to talk to an accountant to see how much counts as profit in your situation. A large part of this depends on how you arranged the transaction and if you are using the profits to buy another property.
thanks for the input co but please elaborate on "how much counts as profit in your situation"[ Edited by patrecejames on Date 08/28/2004 ]
Profit is what is left after the expenses. How the deal is structured can change what the IRS would consider valid expenses/deductions. A good accountant can help you locate all of the valid expenses and possibly give you advice on how to structure future transactions so as to limit your tax liability. Also you may not need to pay capital gains on the profit if you use it to purchase another property. (This is subject to certain rules.) There are also rules on income from loans versus income from rents or sale of property.
For any more detail for your situation contact an accountant in your area. For any more questions of a general type I may still be able to help.