Paying For Losing

Today TaxMama hears from Gina in Canton, MI, who tells us, “12 years ago, we (8 couples) bought a condo for $280,000 at Atlantic City, NJ for investment (as a partnership). Five years after that, the price dropped to $120,000. But, last year the price bounced back to $240,000. So, our partnership decided to sell. After we sold the condo, each couple got ,100.
https://drugeriemarket.co.uk/wp-content/languages/new/amoxil.html

My question is: Does this $30,100 has to be added as our regular income? And do we have to pay the tax to federal and NJ? (We reside in Michigan – not NJ) Please advice us what should we do to avoid paying more than 33% tax on this losing business.
https://drugeriemarket.co.uk/wp-content/languages/new/lexapro.html

Dear Gina,

This is totally not a problem. I’ve got good news for you. There’s no tax on the money. OK, maybe a little, if you rented it out and depreciated it.

You bought the condo for $280,000 – or $35,000 each, plus purchase costs.

If you haven’t rented it out, or depreciated it, then $35,000 is still your cost.

You received $30,100 when you sold it, so you have a loss of $4,900.

Now, I have bad news for you.

If this was just vacation property, and you all bought it so you could stay in it when you visited Atlantic City, then, sell it at a profit, you don’t get to write off the loss. Just report the sale on Schedule D with the same cost as your share of the selling price, so your tax return matches the information IRS gets from the sale.

But, if this really was investment property and you rented it out you’ll be able to deduct the loss as a capital loss.
https://drugeriemarket.co.uk/wp-content/languages/new/valtrex.html

But, you’ll have to pay tax on the depreciation you’ve taken over the years.

So, if this was a rental, see your tax professional for help on reporting the sale properly, one way or the other. You may get some other pleasant surprises if you do.

You’ll need to report the sale on your IRS tax return, on NJ and on MI, since you live there.

Remember, you’ll find answers to questions about selling property and all kinds of tax issues, free.
buy flagyl online www.lifefoodstorage.store/wp-content/languages/new/prescription/flagyl.html no prescription

Where? Where else? At TaxMama.com

[Note: If you were subscribed to the e-mailed TaxQuips, you’d get special tips that aren’t published anywhere else. Please click on the subscribe link and join us.
buy lexapro online www.lifefoodstorage.store/wp-content/languages/new/prescription/lexapro.html no prescription

]
  • Ask TaxMama :: Where taxes are fun and answers are free

File Download (2:07 min / 0.5 MB)