Tax question. (captial gains and real estate)?

Question

Tax law is super confusing!!!!!!!

i own a condo and am about to sell it.

i've owned it less than two yrs. the sale price is 46,000

i paid 41,000 and i own 35,0000 on the morgage.

the realitor gets 6% and closing costs are $2,500.

how much roughy will i get after paying captal gains?

Answer 1

You shouldn't have a gain, so shouldn't owe capital gains taxes.

You'll have $2760 commission, $2500 closing costs and a mortgage payoff of the $35,000 - that totals $40,250.  So you'd get $5,750.

Answer 2

You will get about $6,000 and will roughly break even with the gain or loss being negligible.

Answer 3

If you lived in the condo for 2 out of the last 5 years you will pay no capital gains tax.

If it was a rental you will owe 15% of your net profit.  You will know that exact number when you get the settlement sheet from the escrow company at closing. In your example, your tax will be zero because your condo went up $5,000 since you bought it.  Your realty and closing costs are more than $5,000.  You'll get the $3,500 proceeds at closing and that's it.

Answer 4

Your mortgage, commissions, and closing costs (which I assume you are paying) total a bit over $40,000.  This leaves $6,000 paid to you at closing.  From this, you can subtract your commission of close to $3,000.  You will pay short-term capital gains on at most $3,000.

However, if you are moving to a new job, you could exclude this gain and pay no  tax.