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real estate investment taxes

Real Estate Investment Basics:    Capital Gains Tax

One of the big concerns of real estate investors is called Capital Gains Tax.    

When a property is purchased, the cost of the property plus expenses are called the 'basis' cost of the property.   

During the period of ownership, the basis can be adjusted up based on expenses incurred, like home improvements, or down due to claiming depreciation on income tax.   This adjustment is called the adjusted basis.  

Upon the subsequent sale of the property, if the net gain on the property exceeds the adjusted basis, Capital Gains taxes may be required on that gain amount, and can be handled in various ways.  Portions of the gain can be excluded from capital gains tax. A person's main residence may not require payment of capital gains taxes   The most central issue is whether or not the property was owned for the short term (1 year or less), or the long term (over 1 year).   

Short term capital gains are normally taxed at the normal income tax rate based upon your tax bracket, which is a higher amount than what is required for long term capital gains.   Long term capital gains are taxed at a rate between 8% and 20%.   

This page is meant to introduce the topic of capital gains taxes only, because people always ask about it.   For a complete understanding, visit the IRS website and read instructions for Schedule D, Capital Gains and Losses,

or consult a financial planner, tax advisor or CPA.

Example Ordinary and Capital Gains rates from 2014

   *** rates valid in 2014

High Value Real Estate Investments

$1,950,000
24057635 MLS ⋅ ACTIVE Status
Welcome to the Cabanne Castle! This historic 42-unit (24-1 bed/1 bath and 18-2 bed/2 bath) takeover project that has permits and plans approved (expired need to be renewed) has passed framing inspection and has a ton of upside potential and value add opportunity. The building has passed framing inspection (buyer will need to renew permits) and is ready for MEPs (mechanical, electric, plumbing). Capex updates that have already been done are: new roof, tuck pointing, new windows on rear and sides of building and some duct work ran. This sale also includes the lot 5329 Cabanne which is perfect for additional tenant parking. Value add opportunity by converting basement level into additional apartments, storage or offices. This is an amazing fast track opportunity to quickly take over a historic building.

5315 Cabanne Avenue, St Louis
$4,500,000
24054127 MLS ⋅ ACTIVE Status
Well maintained 68 unit, 18 buildings; newer roofs, thermal windows, doors, and appliances. 60 one bedrooms and 8 two bedrooms. Brick one-story buildings. Forced heat, window unit air, and in-unit laundry. Plenty of Parking (1 to 3 spaces per unit) throughout. Walking distance to shopping and public transportation. Easy access to highways and airport. The tenants pay for electric, gas, sewer and water.

9748 Mcdowell, St Louis
$3,200,000
24054125 MLS ⋅ ACTIVE Status
46-2 Bedroom Units throughout the complex consisting of 13 ranch-style buildings. Newer windows, hardwood floors, force heat, and central air, and updated kitchens and baths. Many units have granite countertops and ceramic tile flooring. Lots of parking throughout. Close to major highways and easy access to the airport and downtown.

1 Marvin, St Louis
$2,600,000
24043262 MLS ⋅ ACTIVE Status
Incredible opportunity to own the Grant School Apartments. Grant School was originally built in 1893 and underwent a total and complete redevelopment in late 2005. All systems were updated and modernized at that time. The property consists of 27 units. The property recently had all common areas updated as well as 6 units that underwent a full cosmetic rehab with updates to the following: kitchen - stainless steel appliances, quartz countertops, bathroom, appliances, central air, and new flooring throughout. The building has incredible rental upside. Market rents for 1 bd unit - $1,013 & 2 bd units - $1,407.

3009 Pennsylvania, St Louis
$1,650,000
24041954 MLS ⋅ ACTIVE Status
Welcome to 5300 Maple Ave.: 2 buildings comprised of 18 units: 12 (2 Bedroom units), 4 multi-level town homes (2 bedroom units), 2 (1 bedroom units). Property has been receiving upgrades since acquisition: a newer roof less than 5 years old including the flat roof; 3 new decks (2 in back and 1 in middle); wooden fence in rear; metal fence in front; and many new systems in place. 14 units having been revamped and refreshed. Building features a basement utilized as an office and storage that could provide supplemental coin laundry income. The property is on a quiet dead-end street less than a mile from Forest Park golf course and the famous mansions on Lindell Blvd. Washington University is also nearby. This stabilized property with the tax rate of Saint Louis generates enough income to set it apart from any other multi-family buildings on the market. A realistic pro-forma suggests over a 10% cap if you increase the below market rents. This is an excellent opportunity!

5300 Maple Avenue, St Louis
$1,311,300
24041708 MLS ⋅ ACTIVE Status
This 6 Family in a primetime location near Wash U is perfect for student housing! The building has four 2 bedrooms units and two 3 bedroom units. Units in this area are in high demand due to its walkability to Wash U, Forest Park, The Loop.

5943 Kingsbury Avenue, St Louis
$1,360,000
24038904 MLS ⋅ ACTIVE Status
Here is an opportunity to own a newly renovated, solid brick building with nice floorplans. 16 1 Bedroom, 1 Bath units in 2 buildings. Sale includes 4227-29 Ellenwood (8 units) and 4231-33 Ellenwood (8 units). Majority of units are renovated and updated. Units have hardwood floors, central heating and cooling, updated kitchens and baths. Property enjoys long term tenants, increasing rents and steady income. Solid investment in a great rental area. The property is conveniently located and walking distance from historic Bevo mill, bus stops, Southtown Centre, several restaurants, and establishments. Property is attractively priced at 8% CAP rate.

4227 Ellenwood Ave, St Louis
$1,650,000
24025549 MLS ⋅ ACTIVE Status
Rare offering of 7.52 acres of land on the largest undeveloped property in Olivette. In Opportunity Zone. Excellent location off Olive Blvd with easy access from I-170. Zoned light industrial. Residential and commercial possibilities in Ladue School District.

1290 Dielman Road, St Louis
$1,350,000
24021970 MLS ⋅ ACTIVE Status
Prime land development opportunity nestled in the heart of Jefferson County. Spanning over 10 acres and comprising five distinct parcels, this expansive site presents a canvas primed for your visionary project. With its strategic location boasting visibility from the bustling I-55, attracting over 40,000 vehicles per day, your development will enjoy unparalleled exposure and accessibility, setting the stage for unprecedented success. Zoned R-40 Residential, this property offers a versatile framework for a myriad of development possibilities, whether it be a vibrant residential community, a commercial endeavor, or a mixed-use masterpiece. Situated in unincorporated Jefferson County, you'll benefit from the flexibility of regulations while capitalizing on the area's burgeoning growth and promising future. As an added bonus, the presence of three renovated homes on the site provides immediate potential for rental income.

8703 Metropolitan Boulevard, Pevely
$1,051,974
24013231 MLS ⋅ ACTIVE Status
Rare 2.1 acre commercial development lot located in Bridgeton, MO. Currently an excess parking field, the site is located adjacent to SSM's sprawling DePaul campus with 476 beds. Site is served by three (3) access points and enjoys pylon signage along St. Charles Rock Road. Broad B-5 "Planned Commercial District" zoning provides for a variety of potential uses, including medical office, hotel, retail and beyond.

12386 Saint Charles Rock Road, Bridgeton
$1,199,000
24007146 MLS ⋅ ACTIVE Status
Location, location, location! Looking to add a brick 6 family, FULLY RENOVATED, apartment building to your investment portfolio? Look no further. Welcome to 713, 715, and 717 Barton, a COMPLETELY GUT REHABBED Building. The building has 6 LARGE units (2 2Bed/2bath units, 4 3Bed/2Bath units) that have been completely gut rehabbed. Units are 100% furnished and all furnishings are included in the sales price. BIG parking lot in rear that holds 6 cars. Highlights of the property are beautiful curb appeal, spacious accommodations, and character galore! BRAND NEW ROOF INSTALLED AUGUST 2024! Local attractions feature all of Soulard's best; loads of restaurants and fresh produce offered at the famous Soulard's Market. Reach out to learn more today!

713 Barton Street, St Louis
$1,599,000
24006822 MLS ⋅ ACTIVE Status
Updated with new price, again! Great opportunity, in area with limited availability. Your chance to own property in U City Loop, 12 units all 2/1. Great rents with room to increase. 3 X four families all in a row with lots of updates. Great walk score, with short walk to the Loop for restaurants, bars and other fun activities, walk to Washington University and walk to the best municipal park in the US, Forest Park, for a great day of golf or tennis, time at the zoo, bike ride or leisurely walk. The package includes 900, 904, and 908 Eastgate. Owner would also sell properties individually, and 908 is duplicate Listing. Please note that basements flooded in July 2022 during an unusually heavy storm and sewers backed up. The property is not located in a flood plain according to seller's insurance. Please check with your insurance. Please note that building size and lot size are for one building only and as a result some calculations including dollars per square foot is incorrect.

900 Eastgate Avenue, University City
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