How much taxes would I have to pay?

kyleen H: How much taxes would I have to pay?
I bought a house in April of 2007 for $ 85,000 I then moved to a different house and rented the previous one out in August of 2007. I am now selling the old house for $ 117,000, and am closing next week, How much taxes am I going to have to pay?

Answers and Views:

Answer by Joseph C
Under an Obama regime, it would be about 40 per cent more than whatever it is now. In addition, your income tax will go up and other secret taxes he’s not telling you about will be inflicted, especially to pay for his health care and other facets of his madness.

It’s fortunate for you, however, that you’re selling BEFORE Obama could conceivably seize power, Heaven forbid.

Answer by Steve D
You capital gains at most will be $ 32,000, but you will be able to deduct your expenses in buying and selling the house and any repairs and possibly some depreciation. Short term capital gains can be 30%, so at most, your taxes will be $ 9,600, but with costs associated as above, I would expect your gains to be much less, and hence lower capital gains taxes.

You need a good tax attorney/accountant to make sure you get all the deductions and adjustments to your cost basis as you can to minimize taxes.

Answer by Roy J
There is not enough information for a 100% accurate answer. Based on the information given, there is a taxable capital gain of $ 32,000 ($ 117,000 sale minus $ 85,000 basis). Generally, investment real estate gains are taxed at 25%, so the tax would be $ 8,000.

Please note there are several exclusions, deductions, and changes to basis that could effect the tax amount. For example, costs to get the property ready for sale (i.e.: painting) reduce the gain. Since this is rental property, you must reduce the basis for depreciation which will increase the gain. Some closing costs may increase the basis (and lower the tax). Use Schedule D from the 1040 to figure the exact tax. Hope that helps!