books0fan Posts: 2, Reputation: 1 New Member #1 Apr 29, 2006, 10:29 PM
Hi,
I would like to know how to calculate the capital gains taxes I will owe. I was recently bought out from a commercial property I was part owner of (50%). My father purchased the land in 1989 for \$361,000 and in 1994 he quit claimed it to me and my two sisters, so I owned 1/3 of the property. In 2004, we bought out one of my sisters, so I then owned 1/2 of the property. In 2006, when I was bought out, the land was appraised at \$980,000 (outstanding loan was \$440,000) and I was bought out for \$250,000.

 AtlantaTaxExpert Posts: 21,836, Reputation: 846 Senior Tax Expert #2 Apr 30, 2006, 11:40 AM
Not enough information.

Was the \$440K loan assumed or paid off?

What was paid to the sister in 2004?
 books0fan Posts: 2, Reputation: 1 New Member #3 Apr 30, 2006, 02:12 PM
In 2004, when we bought my sister out our assumed loan on the property was \$155,000 and we bought her out for \$300,000. In 2006, the \$440K loan was assumed.

Thank you
 AtlantaTaxExpert Posts: 21,836, Reputation: 846 Senior Tax Expert #4 Apr 30, 2006, 05:57 PM
Based on what your father paid (\$361K), your original basis for 1/3 of the property was \$120,333.

When you bought out your sister, your basis increased to \$347,833 (\$227,500 + \$120,333).

Assuming you were responsible for one-half of the \$440K loan, your net proceeds was \$470,000 (\$220,000 for the loan plus \$250,000).

Your net capital gain would be \$122,167.

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