Tax Question: Selling Apartment Complex

5 Replies

Hi All,

I have a property in the Columbus, Georgia under a LLC. If I'm looking at $150K gross profit after the sale, how much of it will go to paying taxes?

how long owned?

What is your basis?

is the $150,000 the gain above original purchase price or Adjusted basis?

If a gain of $150,000 over adjusted basis, and a long term gain, I think the capital gains rate is 23%  on the actual gain plus your tax rate on the depreciation recapture. 30% may be a good number to estimate. see a CPA.

Originally posted by @Arlan Potter :

how long owned?

What is your basis?

is the $150,000 the gain above original purchase price or Adjusted basis?

If a gain of $150,000 over adjusted basis, and a long term gain, I think the capital gains rate is 23%  on the actual gain plus your tax rate on the depreciation recapture. 30% may be a good number to estimate. see a CPA.

 owned for less than a year.  gain above original purchase price.

Then the gain will be taxed at you current tax rate. Depends on what you make in a year, from all your income, I think the highest personal tax rate right now is 39%.  If it was considered a flip, the IRS could consider it subject to FICA(an additional 15.3%) and you were in the business of buying, fixing, and selling properties.  

Your basis includes improvements.

The tax rate would the rate  that you would have if you added that profit to your W-2 and other income.  So the tax rate for 150k plus whatever.  You will need to do alternative minimum tax calculations too I think. But ask a CPA. The government doesn't make the calculations easy. 

The difference is probably worth holding it to make it long term if you can.

I appreciate all of the replies to my post. 

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