Sale of U.S. Property
Posted date : May 30, 2019.
I was reading your reply to a member from Ontario, who asked about capital gains tax. We own a home in Florida. Bought it for US$65,000 and are selling it for US$130,000. We were told that we could deduct improvements we made to our place, such as all new windows, new roof, new AC, new floors, new water heater, etc. We were also told that any capital gains under $250,000 did not need to be reported. This was from a U.S. real estate lawyer. I am curious to know your advice here.
Love to read your column.
Sharon & Donnie
Ed.: Upon sale, U.S. capital gains tax (approximately 20% of the gain) is payable on the net gain. In calculating the net gain, the formula would be the sale price minus the purchase price, minus costs of purchase, minus costs of sale, and minus costs of your many improvements to the property. One does not necessarily have to have receipts, as the only time one would need these would be in the event of an audit. We believe that the U.S. real estate lawyer is incorrect.