All Forum Posts by: Nat Serrano

 any recommendation? (tax accountant with real estate emphasis)

hi all, I've read a lot of capital gains but still I don't get answer.

I bought a house in 2016 for 200k, lived for a a few months, then moved and used it as rental property.

In 2022 I refinanced because of the low rates, got 150k cash out, owe 350k to the bank

In 2023 I received an offer to buy it for 450k, I was laid off so I only had 40k income in 2023 (so far) and we file married jointly, my wife doesn't have any income.

How much will I pay in capital gains taxes?

is the equity/cashout I got from the bank considered as capital gain and taxed? (150k)

is the capital gain considered income? so if I get 100k this year from the sell (450k-350k debt = 100k), will my total income in 2023 would be 140k? (40k income 2023 and 100k cash from the sell, minus commissions etc) or will the IRS consider only 40k (w2 income)

I know the 0% tax rate cap if married is 80k, so if capital gain is considered income then I won't sell because my income will surpass 80k, but if I don't have to pay capital gains because of being unemployed then I'll sell.

PS: I have another property that produces revenue but to my knowledge that is not considered taxable income for the capital gains (pardon for my non accountant lingo)

if needed I can pay for a quick consultation to clarify my question

thanks

Nat

What if I don’t have any w2 income in the year I sell, but I receive 60k in revenue from a property I own but actual cashflow a year is 12k. Will I have to pay capital gain taxes?

 thank you, makes total sense. I just need to find a reliable contractor that can do the remodel from the distance 

I have a triplex I bought in 6+ years ago for 190k, I refinanced and got some cash out, now I owe to the bank 350k and my cash flow is minimal after refinance ($100-200) and now I live far away and because the home is old things have been breaking more often than before($$$$) and contractors do not do a good job if you're not there present in my experience (fix same thing over and over)

The triplex is really old and outdated, but I get renters because is in a really good location and I foresee it will continue to appreciate or at least investors might be interested in buying , tearing down and building something fancy.

So I've been thinking about selling. how much will I make if I sell?

this is my thought process:

A) sell 500k, minus 7% closing, agent commission = 465k minus 350k to the bank = 115k minus 30% capital gain tax = 77k....by the way, will I pay tax capital gains on the net profit? or the gross profit sale? (if I pay on gross sale then it's 500k - capital gain gross sale (30%) = 150k to Sam!

B) sell 500k, minus 7% closing, agent commission = 465k minus 350k to the bank, then do 1031 exchange for those 115k but (as previous debt cannot be used in 1031 exchange) and buy a similar property, the only "problem" is that I live in NYC and 115k will not even buy me a studio here, unless I go to a foreclosure and buy something there

C) keep the property, fix a bunch of things 50k, live with the headache of maintaining a property at the distance, do not make any cash flow for years but hopefully sell in the future for a profit.

thoughts?

 so the debt free money (150k debt equity) becomes a capital gain after selling the house?

I don't "mind" 15% taxes of a 150k capital gain, but 15% of 300k is way too  much...

 so I don't pay tax for all the capital gains? (150k in equity debt + 150k cash in 1031 escrow) 

or can I just avoid tax in the 150k that I will put in escrow with a 1031 person? (and pay taxes for the debt money)

Hello all, my question is pretty basic but I cannot find a good answer online. 

How much will I pay in capital gain taxes?

I have a triplex that I bought for 200k 6 years ago, I refinanced to take cash out and now I owe 350k, I can possibly sell for 500k.

Will I pay capital gains for 300k or 150k(debt is tax free).

taxes: married

Thanks!