The Capital Gains Blog

Archive for the ‘Capital Gains on Sales’ Category

Question: How to figure Capital Gains Tax on property sold under installment sale.?

I was very fortunate to sell my primary residence in 2005 and hold the mortgage. It balloons in 2010. I get interest only until then. I only paid taxes at the time of sale on the downpayment. I pay taxes on interest as I get it. The amount of pricipal will be a very substantial amount and I am worried about taxes when I get the money in 2010. How do I find out how much I can expect to owe now. The new President has said he will raise taxes on people getting over $250,000. What should I do? Thanks everyone.
Thanks everyone for taking the time to answer my questions. As you suggested I guess I will get a CPA to look it over and tell me what I should do. I am worried about Obama’s tax plans, as I guess most are. Thanks again!

Answer: capital gains is basically about 15% now
obooma’s tax raise wont affect you till the end of next year
without having your balance sheet in front of me
just take what you have invested in the property
subtract that from what you get and take 15% of the balance
and thats your tax..
a good cpa or tax preparer would have better knowledge of how to report it and if and when to reinvest it to postpone the tax to a later date

Renasant Corporation Announces 2009 Fourth Quarter and Year End Earnings Results

Renasant Corporation today announced its earnings results for 2009. Â Net income for 2009 was $18,518,000 as compared to $24,052,000 for 2008. Â Basic and diluted earnings per share were $0.88 and $0.87, respectively, for 2009 compared to basic and diluted earnings per share of $1.15 and $1.14, respectively, for 2008. Â

Question: If you sell a covered call on your stock and get called out but buy the stock right back hows the tax work out?

In an individual account, if you sell a covered call against a stock you own and then get called out but buy the stock right back, what kind of tax consequences is this? Is the gain on the premium of the covered call considered a short term gain of income or short term capital gain?is the sale of the stock when you get called out considered a sale of stock even though you bought the stock right back? Is there any wash sale rules that come into play here? Can any explain what’s goin on in a situation like this, accountants have had trouble answering me. Thanks

Answer: The income from the call treated increases the amount realized on the sale and the tax on the gain would depend on the holding period. If it was longer than a year it would be capital gain otherwise it would be ordinary gain on the short term sale of stock. Buying the stock back has no effect unless there had been a loss.

Carter’s Inc. Reports Operating Results (10-K/A)

By 10qk. Carter’s Inc. ( CRI ) filed Amended Annual Report for the period ended 2009-01-03. Read more » »

Question: Answer these tax questions please?

1. How much in a year does someone have to live with you if you are claiming Head of Household?
2. What gives you the best tax deduction.. filing MFS, MFJ or Single?
3. How much capital gain do you have to make on the sale of a home, and how long do you have to live in a home before it is not considered a taxable capital gain on the sale?
4. Can the IRS garnish your unemployment benefit if you owe back child support?
5. What is the amount of standard deduction for a single person and can I write off donations if they amount to less than my standard deduction?

I am asking these questions to see how many of you answer correctly. I keep getting thumbs down from ignorant people in here on answers that are perfectly correct and valid. So what is up with all the thumbs down?
10 points for best answer. Thanks.

Answer: 1. Your CHILD or other qualifying person has to live with you more than half of the year and you must have paid more than half of the cost of maintaining your household. However if the qualifying person is your dependent parent they do not need to live with you at all.

2. The highest standard deduction goes to MFJ.

3. There is no limit on the CG you can make. If you meet the tests you can exclude some or all of it from tax, $250,000 if your filing status is Single, HoH, or Qualifying Widow(er) or $500,000 if MFJ. You must own and live in the home for 2 of the 5 years immediately prior to the sale and not have claimed the exclusion within 2 years immediately prior to the sale.

4. The IRS has no control over unemployment insurance. The state that pays the coverage can dock it for unpaid child support, however.

5. For 2007 it’s $5,350. You can only take charitable donations if you itemize and while you COULD itemize your deductions if they totaled less than the standard deduction it would not make sense to do so. However if you file MFS and your spouse itemizes then you must also itemize even if your itemized deductions are less than your standard deduction.

However I must challenge your claim that your answers are “perfectly correct and valid.” You have a FEW answers that were OK but quite a few more than were either missing important details or were simply wrong from the start. I’d be happy to provide a laundry list of them if you wish, though someone else has already done so so I see no need to compound the misery. I suspect that you’re either a newbie to taxation OR someone who has failed to keep up on the rapid pace of change in tax law.

In lawsuit, fuel vendor accuses Mihos’s business of nonpayment

Financial woes appear to be mounting for Republican gubernatorial candidate Christy Mihos, who now faces a lawsuit accusing his convenience store chain of not paying $634,000 it owes for fuel deliveries.

EBay 4th-quarter profit climbs, helped by PayPal, holiday shopping season

SAN FRANCISCO – EBay Inc. said Wednesday its fourth-quarter earnings rose as its PayPal payments business grew and holiday shoppers gravitated to its online auctions and “Buy It Now” offerings. The company also logged a large gain from the November sale of its Skype telecommunications business.

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Question: Reinvesting the captial gains from an investment property into another property? How does that work?

Is it true that if you use the capital from the sale of an investment property and put that towards another property that you will not be taxed on the capital gains via tax? How does this work exactly?
And can you use the capital gains toward any type of property such as a primary residence or a second home or does it have to be toward another investment property to avoid paying Capital Gains Tax on those proceeds?

Answer: The 1031 (refers to Internal Revenue Code Section 1031 which explains the exchange) “like-kind” exchange has specific criteria to qualify as a nontaxable event. You must exchange for similiar BUSINESS USE property and you must use a qualified intermediary if you are buying/selling real estate that is not a “direct” exchange. The delayed, non-direct exchange is referred to as a “Starker” exchange. The qualified intermediary will handle all money – if any actually comes to you (or an account where you have access, etc) the exchange will not qualify. After selling the property you must identify replacement property within 45 days (EXACT property with legal description) and take posession of replacement property within 180 days.

Hopefully this helps. The IRS website has a publication on like-kind exchanges which may help you. You can download here: http://www.irs.gov/publications/p544/ch01.html#d0e2447

European Stocks Decline as Alstom, HSBC Retreat; Cadbury Gains

Jan. 19 (Bloomberg) — European stocks declined as a report showed investor confidence in the region’s biggest economy fell for a fourth month and sales at Alstom SA missed estimates. Asian shares dropped, while U.S. futures were little changed.

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