Help me Eyeball my Taxes on this sale

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Rajsx
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Joined: Wed Mar 21, 2007 10:07 pm
Location: Florida

Help me Eyeball my Taxes on this sale

Post by Rajsx » Sat Feb 17, 2018 10:32 am

We have a contract on selling our Office Building & are trying to guestimate the Taxes & the net Take Home Dollar Amount.

Cost Basis of Building in 1999 (Land not included) = 445000
Depreciation taken including 2017 = 206000
________
Adjusted Cost Basis = 239000

Depreciation Tax @ Flat 25% = 206000 x 0.25 = $ 51500

Sale Price = $785000
Basis = $445000
Selling Costs = $50000


Capital Gains = 290000

Long Term Cap Gains Tax 290000 @20% = $ 58000

Total Tax to Pay (Cap Gains + Depreciation Recapture) = $109500

Net Proceeds = Sale Price 785000 - All Taxes of 109500 TAKE HOME = $ 675000


I used this site for above calculations -
- http://www.wgcpas.com/tax-alerts-2015-a ... eal-estate

Am I in the Ball Park ?? Thanking you in advance
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grabiner
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Re: Help me Eyeball my Taxes on this sale

Post by grabiner » Sun Feb 18, 2018 10:59 am

Are all the long-term capital gains taxed at 20%? That is only the rate if the overall income would be in the top tax bracket, which might be the case for you.

In addition, you will pay the 3.8% Net Investment Income tax on all or almost all of the capital gain.
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Rajsx
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Joined: Wed Mar 21, 2007 10:07 pm
Location: Florida

Re: Help me Eyeball my Taxes on this sale

Post by Rajsx » Mon Feb 19, 2018 5:57 pm

Grabiner,

I suspect I will be ending up paying 20% Tax when I include this sale proceeds in the income this year.
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grabiner
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Re: Help me Eyeball my Taxes on this sale

Post by grabiner » Mon Feb 19, 2018 6:29 pm

Rajsx wrote:
Mon Feb 19, 2018 5:57 pm
I suspect I will be ending up paying 20% Tax when I include this sale proceeds in the income this year.
Remember the way tax brackets work. You pay 15% tax on capital gains up to the amount which makes your total taxable income $425,000 single or $479,000 married, and 20% only on gains above that figure. Thus, if your income before the capital gain is $379,000 and you are married, the first $100,000 of the capital gain is taxed only at 15% (although the 3.8% surtax applies to all of it.)
Wiki David Grabiner

Rajsx
Posts: 355
Joined: Wed Mar 21, 2007 10:07 pm
Location: Florida

Re: Help me Eyeball my Taxes on this sale

Post by Rajsx » Mon Feb 19, 2018 6:31 pm

Thanks David,

I understand that better now

With best regards
We do not stop laughing because we grow old, we grow old because we stop laughing !!

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