And if you're looking for tax and business books... there's quite a selection.
Please visit our favorite collection of award winning sites - where your TaxMama is a contributing WebScout. There are some clever, quick-to-load places to learn from, shop and explore.
YOUR WEBSCOUT
Oh, yes, if you need a break, please visit my favorite places:
Published by Eva Rosenberg, EA, aka TaxMama
Volume 2, Issue 71, July 9, 2000
What Color are His Eyes?
Dear TaxMama:
I have a question that I hope you can help me with. It's regarding
capital gains tax. I currently live in Jacksonville Florida and am
renting a home. I've been in this rental house for 5 years. I have
a home in Savannah Georgia that I purchased in 1991 that I just
recently sold. The house was not used for rental property, but as
a place for us to stay at while visiting in Savannah.
I sold my house in Savannah for $97,000, less the Realtor fee of
$4,850.00 and $1,000 in repairs netted approximately $91,150.00.
I had a mortgage for about $62,500.00. At closing I was given a
check for approximately $28,500.00. Do I have to pay capital
gains on this money?
Thanks,
Timothy C. T.
TaxMama Replies
Dear Timothy,
This question reminds me of the riddle about the
bus - it is going southbound on Park avenue,
12 many people get on at the first stop, 3 get off. 4 people get on
at the next stop and 2 people get off. 6 folks get on and 4 off at
the next stop. Got it all?
Now, the question is, "What color is the bus driver's eyes?"
My answer to you - is I haven't a clue!
If the home was not your principal residence (was it?),
you are not eligible for the $250,000 exclusion on the sale.
If it was an 'investment' property, the amount of cash
you received from the net sale doesn't matter.
The main numbers you left out were in the first part
of the equation -
Purchase cost and
costs of improvements.
Subtract those from the sales price, less selling costs and you have
your taxable profit - or loss.
The second piece of missing information is your
tax bracket. The capital gains rates change
depending on your income level (10% - 25%)
Ms. Rosenberg,
Thank you for responding not just once, but twice. I looked for your reply the first time, but the fact you took the extra time to reply again is greatly appreciated. We had already found one of the two sites you suggested for information, but the second one proved very helpful.
With your first suggestions, along with additional research we have done on LLCs and S Corps, my mother and I had decided on structuring our business as an S Corp. We were discussing the self-employment aspect of it last night, so it was a pleasant surprise to find your email this morning!
Thank you for your help. I hope you have a wonderful weekend and a great summer!
Kathy P and Shirley S
Professional Financial Solutions
TaxMama
c/o GifTech Corp.
2961 Industrial Rd., Suite 731
Las Vegas, NV 89109
800-594-9829 800-5WHY TAX?
TaxMama's goal is to help you break the code that is the U.S. Income Tax System. We will gladly entertain your questions. Please feel free to submit them to asktaxmama@taxmama.com
There's no guarantee that we'll have room for all your questions, so we'll try to address those issues that will help the most people.
Some of your questions may have already been answered in the past year or so. There are a wealth of articles already in place at The Directory of TaxMama's Articles
While this newsletter is offered to you for free, your TaxMama does tax consulation, tax writing and tax preparation for a living. So, if you need articles, guidance, research, audit
representation, business advice or a tax return, please contact Eva Rosenberg, EA at mailto:payforadvice@taxmama.com.
Also, please feel free to call 800-594-9829 if you need a dynamic speaker at your next conference.
Incidentally, if you are doing any kind of business on the WWW, especially if this is a new environment for you,
you must read the I-Sales HelpDesk & WebReview. This is a daily digest with thousands of readers worldwide who are prepared to answer your questions about how the Internet and E-Commerce works. Even stupid questions are welcome. This forum was created to help protect you from being victimized by smooth operators - and to help you avoid the very costly mistakes made by others.
Tax Mama says, "it's cheaper to learn from someone else's mistakes than your own. " To subscribe with the word - subscribe - in the Subject line of your message.
This site and its contents are copyrighted by Eva Rosenberg , 1996,1997,1998,1999, 2000 . If you want to reprint any articles or use any of the materials, please contact The Tax Writer.
If you are serious about building a business on the Web, one that
makes money even when you're not working... youmust attend
this seminar - The Affiliate Force 2000 on July 28 - 29.
This month, it's in Los Angeles, next in San Francisco, then...
it hits the Road
Meet your TaxMama, teaching the Internet TimeLine, a
business outline and checklist for doing it right. To be invited to
"Lunch with Eva," sign up from here.
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Sharing the Secrets
Anyone can do taxes...All you have to is pass the Exam - on
September 28 and 29, 2000! (Not as easy as it sounds, is it?)
But it's a great career option! No degree necessary. Great way to pay for college! Or support a young child. Learn what it takes to become an Enrolled Agent,
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TaxMama is a member of the Womens' Forum. You'll find excellent information for work-at-home moms, small businesses, juggling work and family - even men can get a great deal out this resource.
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For the accounting professionals, you can read TaxMama's monthly columns on
AccountingNet.com . They have
excellent resources and tools for the accounting and tax professions.
We want to welcome the ParentPreneur Club
to the family of sites carry TaxMama's column. You'll find excellent resources for the unique
problems of parents in business for themselves.
