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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

$1,200,000
23056819 MLS ⋅ ACTIVE Status
RARE 6-Family Building near Wash U - Ideal Student Housing Opportunity! Welcome to 5931-33 Kingsbury, perfect for Wash U student housing and strategically located near Wash U. This impeccably maintained 6-family building boasts updated plumbing, HVAC, and electric. Large units easily convert to three bedrooms for maximum monthly income. Post-conversion to three-bedroom units, area comps support rents at $1,995 and higher, depending on finishes. Apartments in this high-demand area fill quickly and maintain 100% occupancy, making it a true legacy asset. Off street parking behind the building for each unit, and beautifully manicured lawn. Well maintained wood decks. Newer TPO roof and PVC sewer lateral lines ensure a low maintenance building for years to come. Seller is a Missouri Broker and will meet for showings. Showings strictly by appointment and require proof of funds. Don't miss this outstanding investment opportunity in a prime Wash U location.

5931 Kingsbury Avenue, St Louis
$2,100,000
23054755 MLS ⋅ ACTIVE Status
Extremely well maintained 12 unit complex in Historic Soulard. All systems and units have been updated w/ in unit laundry, kitchens & baths. Most units have newer HVAC. Newer roofs. This complex consists of 4 buildings, (2) 4-family buildings and 2-duplex alley carriage houses. The 4-family buildings consist of (4) 1 -bedroom 1-bath units, (3) 2-bedroom, 2 bath units and (1) 2-bedroom, 1-bath unit. The carriage houses consist of (4) 1-bedroom 1.5 bath units. All the units have open floor plans with lots of natural light and exposed brick. The buildings sit on a large lot that offers a nice private community courtyard with ample green space. Virtual tour link: https://my.matterport.com/show/?m=gScCvPoGGTn

1818 S 8th Street, St Louis
$1,099,000
23046640 MLS ⋅ ACTIVE Status
This 18 unit property located in Dutchtown is a great and rare opportunity for investors. Conveniently located not too far from Tower Grove Park. This complex is well maintained with plenty of upside to be had.

3747 Dunnica Avenue, St Louis
$1,325,000
23041329 MLS ⋅ ACTIVE UNDER CONTRACT Status
GREAT STABILIZED ASSET W/ LIGHT VALUE-ADD OPPORTUNITY, 6.8% CAP RATE - 16 UNITS, 2 BUILDINGS IN THE PRINCETON HEIGHTS NEIGHBORHOOD OF ST. LOUIS, MO! This garden-style property features 14 one bedroom one baths and 2 two bedroom one bath apartments. Unit upgrades have recently been completed to all units including new hardwood flooring, kitchen/bathroom remodeling and fresh paint. Each building contains a basement with coin-operated laundry and storage units for tenants. The property is located at a highly-visible South City intersection surrounded by a vibrant business district brimming with local shops, eateries, cafes, restaurants, parks, and more. Perfect for self-managed local investor. The property has had consistent high occupancy with impressive rent growth.

6265 Gravois Avenue, St Louis
$1,139,486
22011275 MLS ⋅ ACTIVE Status
PRIME vacant land, Zoned Commercial. This 2.59+/- acres is in a GREAT location in growing Wentzville, near Hwy 70! A new QT is currently under contract directly across the lot, sitting on Hwy Z and Interstate Drive corner. NEW homes being built nearby! DON'T MISS this PRIME opportunity for your business in a PRIME spot! (Additional 34.51 +/- acres adjacent to this lot is for sale as well.)

Hwy Z & Interstate Drive, Wentzville
$1,650,000
22010877 MLS ⋅ ACTIVE Status
Rare offering of 7.52 acres of land in Olivette on one of the few undeveloped properties in the area. 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
$3,999,000
22009617 MLS ⋅ ACTIVE Status
Development Opportunity! This 59+ acre beautiful parcel of land is now available! Located right off of Telegraph Road, this acreage is near newer residential developments in Oakville. The land is level to sloping towards the rear. This sale includes two parcels, 34K-22-0102 & 34K-31-0078.

7347 Telegraph Road, St Louis
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