captial gains on tax deed property

[Bryan Freeman]

Let's say I buy a property at a tax sale (deed) for $1000. During the course of the next year and a half, I pay about $3000 in attorney fees for quiet title, survey, and the next year's taxes. After one year, I sell the property for $10,000.

Will I have to pay capital gains on $9000, $6000, or somewhere in between? This is my first one, so I'm not sure how it works.