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Re: FYI: CapGains Tax Planning Tip
06-22-2006, 09:20 PM
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#21
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Recycles dryer sheets
Join Date: Dec 2003
Posts: 51
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Re: FYI: CapGains Tax Planning Tip
I had to dig into my old tax returns to find this...I sold a rental property in 2003.
The sale of a rental is reported on Form 4797, Sales of Business Property. After all, you're in the business of renting out your real estate to make money.
Once you figure the gain on the sale, it's carried over to Schedule D and reported as a capital gain along with your sales of securities, etc. Schedule E is for reporting income from rentals as you operate them, not when you sell them.
So I would think that lazygood4nothinbum does have a good plan to time the sale of the rental to 2010...Nords you threw me at first because I was thinking, oh that's right I did report the sale of my rental on some other form. But in the end it's treated like a capital gain just like those from stock sales.
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Re: FYI: CapGains Tax Planning Tip
06-23-2006, 05:18 AM
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#22
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Posts: 2,603
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Re: FYI: CapGains Tax Planning Tip
Yup, as long as you keep the property a year you get the 15% rate (sold one last year).
BUT, you'll quickly hit the alternate minimum tax then the rest of the gain in taxed as ordinary income. OUCH! I was hit last year ... and the year before.
Flip a property in less than a year it's taxed as a short term gain.
__________________
FIRE'd since 2005
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Re: FYI: CapGains Tax Planning Tip
06-23-2006, 06:44 AM
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#23
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,352
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Re: FYI: CapGains Tax Planning Tip
In figuring whether your in the 15% income bracket does the capital gain itself count as part of the income calculation.
For instance if the 15% bracket creeps up to $34,000 for single in 2008, and I earn 14,000 in income, then can I only sell $20,000 of capital gains/dividends?
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Re: FYI: CapGains Tax Planning Tip
06-23-2006, 06:45 AM
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#24
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
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Re: FYI: CapGains Tax Planning Tip
Yes, the capital gains count.
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No more lawyer stuff, no more political stuff, so no more CYA
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Re: FYI: CapGains Tax Planning Tip
06-23-2006, 09:20 AM
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#25
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,352
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Re: FYI: CapGains Tax Planning Tip
If the law truly changes in 2010 to something less attractive, will this cause a big sell off of stocks held long term? Might glitch the market a bit.
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Re: FYI: CapGains Tax Planning Tip
06-23-2006, 10:09 AM
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#26
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,005
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Re: FYI: CapGains Tax Planning Tip
Quote:
Originally Posted by OldAgePensioner
If the law truly changes in 2010 to something less attractive, will this cause a big sell off of stocks held long term? Might glitch the market a bit.
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There would probably be a lot of sell-and-buy-back action too. Sell today, buy back tomorrow. Over the course of a year, the effect may not be too severe.
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