CAPITAL!GAINS ! the!sale!of!an!asset,!such!as!stocks,!bonds! or!real!estate,!which!amounts!to!more!! than!the!purchase!cost.!This!difference! between!sale!price!and!original!price!(cost! basis)!is!the!capital!gain.!Capital!gains!! ! are!not!based!on!the!purchase!price!but!on! its!adjusted!cost!basis.
IMPORTANT%FACTS%ABOUT% CAPITAL%GAINS%&%LOSSES
HOW%TO%CALCULATE%CAPITAL%GAIN. % irst,!take!the!purchase!price!of!the!home.!This!is!the!sales!price!not!! F the!amount!of!money!contributed!at!closing.! Second
Almost!everything!you!own! and!use!for!personal!purposes,! pleasure!or!investment!is!a! capital!asset.!Capital!gains!and!
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Third,!add!adjustments:
•! !cost!of!purchase,!including!inspections,!transfer!fees,!attorney!fees!! •! !cost!of!improvement,!including!decks,!casitas,!room!additions!with!the! ! such!as!a!roof!or!air!conditioning!unit
capital!gains!from!the!sale!of!a!principal! residence.!Be!sure!to!check!with!your! Accountant!or!CPA!for!professional!insight.
•! !cost!of!sale,!including!inspection!fees,!attorney’s!fees,!commissions!! and!money!spent!on!the!home!to!ready!it!for!sale % inally,!total!the!adjusted!sale!price!and!subtract!the!adjusted!cost!basis!! F from!the!amount!the!home!is!sold!for!to!determine!the!capital!gain.
or!shortJterm,!depending!on!! how!long!you!hold!the!property! before!you!sell!it.!If!you!hold!it! more!than!one!year,!your!capital! gain!or!loss!is!longJterm.!If!you! hold!it!one!year!or!less,!your! capital!gain!or!loss!is!shortJterm.! You!may!deduct!capital!losses! only!on!investment!property,!not!! on!property!held!for!personal! use.!If!you!have!longJterm!gains! losses,!you!have!a!net!capital! term!capital!gain!is!more!than! your!net!shortJterm!capital!loss,! if!any.!If!your!total!net!capital!loss! is!more!than!the!yearly!limit!on! capital!loss!deductions,!you!can! carry!over!the!unused!part!to!!
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Stay%a%step%ahead.%Be%sure%to%specify%Title365.