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katiee_99
New Member

Do I have to pay taxes if I purchased an investment property on a loan and sold it on a real estate contract.

I purchased this property with a business partner.  Do I only claim half?
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1 Reply
Vanessa A
Expert Alumni

Do I have to pay taxes if I purchased an investment property on a loan and sold it on a real estate contract.

Yes, if you sold an investment property you would need to include it on your tax return. Yes, if you owned the property 50/50, you will only claim half of the income and half of the cost basis.  If you owned it for more than 12 months, this would be a Long Term Sale.  It would be taxed at the capital gains rate. The capital gains rates are as follows based on income

  • Zero percent rate for the following income
    • $44,625 for single or MFS
    • $59,750 for HOH
    • $89,250 for Married Filing Jointly
  • Fifteen percent for income more than above but less than below
    • $276,900 for MFS
    • $492,300 for Single
    • $523,050 for Head of Household
    • $553,850 for Married Filing Jointly
  • Twenty percent for the amount that your taxable income is over the 15% level

If you held this property for less than 12 months it is a short term sale and will be taxed at the same rate as your other income. 

 

To enter the sale, select the following:

 

  1. Federal
  2. Income
  3. Show More next to Investment Income
  4. Start next to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B) 
  5. Select Other
  6. Continue through and select property for the type of investment
  7. Answer how you obtained the items you sold
  8. You will need to enter the selling price, dates and the cost basis of the property
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