Capital Gains On A Vacation Home

[Trent]

s About Taxes)/Capital gains on a vacation home Advertisement Expert: Carole Dunton - 7/24/2009 I have a quit claim deed on property that was deeded to me 9-08.

I already have a main home in Illinois that I reside in and this second property is located in Tennessee. There are no liens or taxes owed on the property, it's free and clear. I can not maintain the property & mobile home as I live to far away. So I made the decision to sell it for 22.000 hopefully with out a real estate agent. Someone told me that I have to pay tax gains on this. I'm new to this all and confused on what gains mean? And how much will I have to save from the sale & pay out to taxes?

[Glew]

Hi,

You didn't say what if anything you paid for the property.  Your gain is the difference between the selling price and your cost basis.  Generally your cost basis is what you paid for the property.  If the property was a gift your cost basis is the donor's cost basis.  You can deduct expenses of the sale such as real estate commissions and legal fees.  

If you sell the property before you have owned it at least one year and one day, the gain will be taxed at ordinary income tax rates.  If you sell it after you have owned it one year and one day it will be taxed as a long term capital gain at a maximum rate of 15%(unless congress changes the capital gain tax rates).

Regards,

Carole