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

3166 Highway B, Berger $1,099,000

Have you ever wanted to own a winery & microbrewery? Today is your lucky day, because Bias Winery & Gruhlke’s Microbrewery is on the market due to the owners wanting to r...

0 Baths
21047420 MLS
ACTIVE Status

2758 Walton, St Louis $1,295,000

Nine garages (8 currently rented) for additional income! On-site Laundry! All Brick Construction! Great location with quick access to I-70, I-170, I-270, and I-64! Great ...

0 Baths
21047544 MLS
ACTIVE Status

St Louis $1,000,000

Awesome 6 family building in prime location--building like this do not come up for sale often! Newer roof. New central AC and 90+ furnaces in 4 of 6 units. 5 of 6 un...

0 Baths
21047566 MLS
ACTIVE Status

5711 South Lindbergh, St Louis $3,400,000

Now for sale AND NOW FULLY LEASED WITH ABSOLUTE NNN TENANT WITH PURCHASE OPTION ASK FOR DETAILS. Check out this prime retail property at 5711 South Lindbergh Boulevard. ...

0 Baths
21047553 MLS
ACTIVE UNDER CONTRACT Status

10333 Business 21, Hillsboro $3,500,000

AKA-The Russell House/Inn/Brewery is now available for purchase.Situated on 4.45 acres in the "Heart of Jefferson County," Hillsboro Mo.Extensive Renovations, and additio...

0 Baths
21043257 MLS
ACTIVE Status

4640 Big 3 Acres, House Springs $3,300,000 ▼

Here is a mix of commercial and residential for sale in one package. Tax records show 22.22 acres commercial and 4 residential properties. 4 homes and the commercial plot...

0 Baths
21044795 MLS
ACTIVE Status

2200 Farris County Road, Foristell image

2200 Farris County Road, Foristell $1,823,690

New subdivision development opportunity in Wentzville/ St. Charles County. 60+ acres of wooded and prairie land that is a blank canvas to developers or owners that seek ...

4 Beds
2.5 Baths
21041496 MLS
ACTIVE Status

20 Chandler Court, Florissant $4,500,000

Exceptionally well cared for and 100 % full 58 unit apartment complex (29 1-BR and 29 2-BR units) with one owner for the last 57 years. This complex has been his life's ...

0 Baths
21040947 MLS
ACTIVE Status

115 May Road, Wentzville $1,750,000

2-Story Building has been a church for 7 yrs. So much potential for a school, office, retail, warehouse, etc. Sits on 2-acre lot. Parking lot (80+) includes 4-H spots & a...

0 Baths
21040373 MLS
ACTIVE Status

20 Oak/Forst Drive, O'Fallon $2,200,000

Calling all builders and developers! This 20+/- acres sits right in between Oak Dr. and Forst Dr., and is waiting for your next development. Minutes from O'Day Park/Lod...

0 Baths
21040049 MLS
ACTIVE UNDER CONTRACT Status

Old Lemay Ferry Road, Imperial $995,000

43 ACRES IN A PRIME LOCATION less than one mile away from the A+ RATED Seckman High School! The sale includes 2 parcels - Tax ID's 08-1.0-11.0-0-000-040.01 AND 08-1.0-11...

0 Baths
21039962 MLS
ACTIVE Status

1545 State Road Z, Pevely $1,300,000

Perfect opportunity for development! 10+/- acres with I-55 visibility, over 600 feet of Hwy Z road frontage. Property zoned Commercial and Residential. Duplicate Listing ...

0 Baths
21038959 MLS
ACTIVE Status

5354 Delmar Place Court, St Louis $945,000

Opportunity to purchase 20 lots in DeBalivere Place overlooking the mansions on Washington Terrace. Lots are located near the Central West End, 5 blocks from Forest Park,...

0 Baths
21039000 MLS
ACTIVE Status

11475 Lilac Avenue, St Louis $1,500,000

On the National Register of Historic places, this architecturally significant 1858 Victorian Italianate is on 4.5 acres of landscaped wooded bliss. This unique property b...

0 Baths
21038112 MLS
ACTIVE Status

1200 South Outer Road, St Clair $1,200,000

Investigate The Investment! Need not snoop long to see the value in this 8.2 acres with EXCELLENT HIGHWAY 44 VISIBILITY. Approximately 938 Feet of I-44/Service Road fr...

0 Baths
21037848 MLS
ACTIVE Status

1050 South Cloverleaf Dr, St Peters image

1050 South Cloverleaf Dr, St Peters $999,000

This is an opportunity you do not want to miss! If you are in the market for an investment, office space, store frontage, or a combination of all 3, this is your property...

0 Baths
21030320 MLS
ACTIVE Status

3166 Highway B, Berger $1,099,000

Have you ever wanted to own a winery & microbrewery? Today is your lucky day, because Bias Winery & Gruhlke’s Microbrewery is on the market due to the owners wanting to r...

3 Beds
2 Baths
21026637 MLS
ACTIVE Status

8719 Old State Route 21, Hillsboro image

8719 Old State Route 21, Hillsboro $1,200,000

Excellent Opportunity! 43 ACRES +/- Zoned CC2 for a variety of Commercial/Retail uses. Approximately 300 feet of Old 21 road frontage. Visible from Old 21 and New HWY 21....

0 Baths
21024221 MLS
ACTIVE Status

5050 Washington Place, St Louis $1,400,000

GREAT 9 UNIT BUILDING IN THE HEART OF THE CWE. -THREE 2 BEDROOM 2 BATHROOM APARTMENTS -THREE 1 BEDROOM 1 BATHROOM APARTMENTS -THREE STUDIO APARTMENTS -8 OF 9 UNITS HA...

0 Baths
21023832 MLS
ACTIVE UNDER CONTRACT Status

546 Gravois, Fenton $1,250,000

Two parcels: 5.6 acres plus 0.13 acres with 458 ft frontage at 515 Main Street. Both parcels zoned OT-1 Olde Towne Historic, but adjacent to commercial property zoned O...

0 Baths
21024429 MLS
ACTIVE Status

533 E 5th Street, Washington $1,775,000

Great business opportunity in down town Washington. 3.17 Acres and retail strip plaza. Long terms tenants with leases. Please do not disturb the tenants.

0 Baths
21019261 MLS
ACTIVE Status

4484 West Pine, St Louis $1,900,000

Opportunity knocks! Huge historical CWE mansion, known as the Butler House, built in 1892.Currently zoned as commercial and residential. 2.5 Stories with grand staircases...

0 Baths
21016833 MLS
ACTIVE Status

5300 Jeanette Drive, Imperial $1,250,000

20 acres of Mixed Residential for sale in Imperial, MO, on Hwy 61/67 close to shopping, dining, & entertainment. Opportunity for New Single Family/ Multi-Family Construct...

6 Beds
4 Baths
21013292 MLS
ACTIVE Status

South Hwy 94, Augusta $1,669,000

PRIME DEVELOPMENT/INVESTMENT TRACT IN THE AUGUSTA WINE DISTRICT. THE FIRST VICTICULTURAL DISTRICT ESTABLISHED IN THE UNITED STATES IN JUNE 1980. 16.69 acres, more or les...

0 Baths
21014790 MLS
ACTIVE Status

607 Missouri Avenue, Sullivan $949,900 ▼

Solid commercial investment opportunity. This multi-tenant (100% occupied at time of listing) commercial property is situated just south of I-44 Exit 225. Visible from ...

0 Baths
21009765 MLS
ACTIVE Status

1351 Dunn Road, St Louis $999,999

This property is filled with endless opportunities. It is conveniently located off of a major highway and sits on the Missouri state line of St. Louis County and Madison ...

0 Baths
21010108 MLS
ACTIVE Status

198 Wolfrum Rd 41.03, Weldon Spring image

198 Wolfrum Rd 41.03, Weldon Spring $7,327,793 ▲

High visibility, High Traffic count. Located in St. Charles County, the fastest growing County in the St. Louis Metro Area. This natural property is located in Weldon Spr...

0 Baths
21010139 MLS
ACTIVE Status

10640 Business 21, Hillsboro $1,250,000

Downtown Hillsboro shopping center with 6 bays including anchor store (unoccupied). This plaza currently has 3 open bays and 3 occupied bays. Built in 2006, this property...

0 Baths
21004534 MLS
ACTIVE Status

3456 North Lindbergh, St Ann $960,000

Turn-key Automotive Facility available for purchase. Property includes Automotive Showroom, Office, Service and Warehouse space. Five (5) Drive-In doors with multiple Ser...

0 Baths
21006400 MLS
ACTIVE Status

11647 Gravois Unit #100, St Louis $1,100,000

Renovated in 2008. 2019 Utilities were $11,449.00. See Listing agent for 2018, 2019, and 2020 year-to-date expenses.

0 Baths
21000343 MLS
ACTIVE Status

32 Old Missouri 21, Hillsboro $2,900,000

Land Visibility from Highway 21 and Highway A. 2,698 road frontage on Old Highway Missouri 21. City water and City sewers on property. Perfect for a restaurant or apartme...

0 Baths
20082462 MLS
ACTIVE Status

4536 Old State Route 21, Imperial $950,000 ▼

This property has many potential uses, It has a 20731 +/- sq foot building with multiple uses. Great for a truck line for warehousing and parking, could be used for a lar...

0 Baths
20080831 MLS
ACTIVE Status

3621 Iron, St Louis $3,200,000

This offering represents an opportunity to acquire a 38,413 Square Foot Retail property. The property is currently occupied by one tenant, Dollar General, which occupies...

0 Baths
20079619 MLS
ACTIVE Status

18930 Deer Creek, Wildwood $7,500,000

Welcome to your own private oasis located off Highway 100/Manchester Road in the much desired municipality of Wildwood in St Louis Co, MO, & adjoining Rockwood Reservatio...

5 Beds
5.5 Baths
20078357 MLS
ACTIVE Status

3805 Lindell, St Louis $1,250,000 ▼

Professionally Managed 12 unit apartment building on Lindell right across the street from Saint Louis University, and RIGHT next door to the MOOLAH LANES. This property c...

0 Baths
20075514 MLS
ACTIVE Status

7421 Mexico Road, St Peters $1,450,000 ▼

FULLY LEASED!! Excellent income property with return on investment of 8.57%! Leases expire in 2-5 years. Full brick professional building with lower level walkout. Bu...

0 Baths
20068906 MLS
ACTIVE Status

1788 U.S. Highway61 South South Hwy, Festus image

1788 U.S. Highway61 South South Hwy, Festus $1,765,000 ▼

THIS IS A HIGHLY UNUSUAL AND DIFFICULT TO FIND WAREHOUSE FACILITY OR MANUFACTURING 35,000 tenable space plus 1,400 sq.ft Modular office (not part of 35,000 sq. ft) 16ft....

0 Baths
20059190 MLS
ACTIVE Status

2416 West Meyer Road, Wentzville $2,664,129

A viable 5.56 acre tract of land at the corner/intersection of West Meyer Road and North Point Prairie.Currently unincorporated St. Charles with possibility to annex into...

2 Beds
2 Baths
20050916 MLS
ACTIVE Status

1755 Larkin Williams Unit #1761 & 1781, Fenton image

1755 Larkin Williams Unit #1761 & 1781, Fenton $2,109,800

This is a high quality multi-tenant office/warehouse and service center building, with one full (corner) office suite, and six other suites with variable office and varia...

0 Baths
20044652 MLS
ACTIVE Status

2446 Highway Z, Wentzville $11,250,000

125 Spectacular acres in the heart of Wentzville. Commercial possibilities on Hwy Z & Hwy N. Private, gated entrance, this rare find includes a custom executive Stone hom...

4 Beds
3 Baths
19072909 MLS
ACTIVE Status

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