Sold Investment Property | Minimize Capital Gains Tax, Deduct Closing Costs

You can minimize the taxable gain from the sale of a property by accounting for your sale expenses, like closing costs. Closing costs that you need to consider can be found on the property’s settlement statement.

To minimize your taxable gain from the sale, first locate the Contract Sales Price (Line 401) on the settlement statement. Subtract Commissions Paid (Line 703), Title Charges (Lines 1100-1110), Recording and Transfer Charges (Lines 1200-1205) and Additional Settlement Costs (Lines 1300-1302).

Next, subtract the property’s adjusted cost basis (after depreciation deductions), which will be found on the prior years’ tax return.

This will give you the minimum taxable gain for your sold property.

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This entry was posted on Monday, December 1st, 2008 at 12:01 am and is filed under Real Estate Sales. You can follow any responses to this entry through the RSS 2.0 feed.