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Gain on Sale | How Much Profit Goes In Your Pocket
In this episode Kelly talks about how much profit goes into your pocket when you sell an investment property. It’s starting to be tax time again, so gain on sale is something you will want to understand. It is the taxable profit that is realized during the sale of a real estate asset or property. Because gain on sale is a pre tax measure, the actual amount of money that an investor takes home beyond the gain of sale depends upon his or her own personal tax rate and will require further calculation. If your tax rate is low, you’ll put more money in your pocket when you sell, and if it’s high you’ll put less money in your pocket in the end.
“Selling price minus the adjusted basis equals your gain on sale. You gotta look at depreciation, so how much you can take, how much you’ve taken so far on the property, if any. After tax, gain on sale, or simply gain, is expressed like this. You must take the depreciation credits and the IRS recognizes that it wears out over time and they acknowledge that financially by allowing you to depreciate deductions on your taxes.” 3:27
- What gain on sale actually is 1:15
- Why you should care 2:10
- The formula 3:20
“Selling price minus the adjusted basis equals your gain on sale. You gotta look at depreciation, so how much you can take, how much you’ve taken so far on the property, if any. After tax, gain on sale, or simply gain, is expressed like this. You must take the depreciation credits and the IRS recognizes that it wears out over time and they acknowledge that financially by allowing you to depreciate deductions on your taxes.” 3:27
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By LaunchPod Media inc.
5
55 ratings
In this episode Kelly talks about how much profit goes into your pocket when you sell an investment property. It’s starting to be tax time again, so gain on sale is something you will want to understand. It is the taxable profit that is realized during the sale of a real estate asset or property. Because gain on sale is a pre tax measure, the actual amount of money that an investor takes home beyond the gain of sale depends upon his or her own personal tax rate and will require further calculation. If your tax rate is low, you’ll put more money in your pocket when you sell, and if it’s high you’ll put less money in your pocket in the end.
“Selling price minus the adjusted basis equals your gain on sale. You gotta look at depreciation, so how much you can take, how much you’ve taken so far on the property, if any. After tax, gain on sale, or simply gain, is expressed like this. You must take the depreciation credits and the IRS recognizes that it wears out over time and they acknowledge that financially by allowing you to depreciate deductions on your taxes.” 3:27
- What gain on sale actually is 1:15
- Why you should care 2:10
- The formula 3:20
“Selling price minus the adjusted basis equals your gain on sale. You gotta look at depreciation, so how much you can take, how much you’ve taken so far on the property, if any. After tax, gain on sale, or simply gain, is expressed like this. You must take the depreciation credits and the IRS recognizes that it wears out over time and they acknowledge that financially by allowing you to depreciate deductions on your taxes.” 3:27