Posted by Warren Priske on January 27, 2005 at 20:51:30:
You’re right. I’ve gotten to that point in my career where I try to avoid dirty money (the taxable kind) at all costs. If it weren’t for earned income I wouldn’t have been able to come close to meeting my goals in the residual (and non-taxable) income department. I’m glad you’ve done well. You might start to see things my way someday when you look back at what taking on a partner cost you.
Posted by Rosendo on January 27, 2005 at 15:17:01:
I live in California and own property in Nevada. I owned a property for 13 months, sold it (non-1031) for 50k profit. I know I have to pay 15% cap gains on the profit but do I pay california tax on the profit or do I benefit from the no income tax Nevada rules?
Re: capital gains question… - Posted by Warren Priske
Posted by Warren Priske on January 27, 2005 at 15:42:24:
Wherever you pay your taxes (the state in which you reside) is where you pay your capital gains taxes. In CA that’s about 9%. Additionally, you may have to pay a real estate sales tax required by the state of Nevada (similar to our 3.3 percent). Selling properties is just no fun unless your using a 1031 exchange. And even then it’s pretty anticlimactic, since you never really get the cash. Better luck next time.
Posted by Kristine-CA on January 27, 2005 at 20:03:24:
Warren: why all the doom and gloom? While it’s true that taxes take a
bite out of profits, it’s still fun to sell real estate for a profit! Profit is a
good thing Warren.
I’m taking a huge tax hit for 2004 because all my profits were ordinary
income and my legit expenses were minimal. But the good news is
that I made money. Enough to warrant the tax bill (and hopefully pay it
too.)
I wouldn’t trade paying a large tax bill for the old days (just a couple
of years ago) when being eligible for the maximum Earned Income
Credit was the booby prize for making (and living on) less than 15K per
year.