Tax? Real estate cap gains.

[Michael Drew]

Correct. I cannot claim it as a second home, vacation home, or rental property. For tax purposes, it's simply an investment and is taxed as a capitol gain (once the adjusted gain/loss is calculated). But, because I got a 1099-S from the title company, I have to enter this as a home on the 1040. I can't work it into the investment category of the tax software because investments are not reported to the IRS on 1099-S forms. At any rate, seems to me that all interest, and not just interest in the calendar year of the sale, should all be considered "costs" to acquire the asset. If I had or new a CPA, I would already have dropped the paperwork off. I do not though, and will need to find one. I really was not expecting this to be so damn difficult. I'm tired of reading IRS publications that refer to other publications, that refer back to the first one, then to another..... GRRRRRR

[Ron Citerone]

My personal opinion is the loan interest is not counting toward your cost basis, that is my unprofessional opinion. I get the feeling that you have decided you need professional help. You have plenty of time before taxes are due but not that much time. I think you should put your energy into trying to find the name of a competent CPA from Family and friends in your state/area whose opinion you trust and go from there. Don't let your frustration get ahead of you, it will all work out IMO.

[Tom M King]

I did a Google search for "interest deductible on investment property?" and found plenty of information.

copied and pasted:

To actually claim the deduction for investment interest expenses, you must itemize your deductions. Investment interest goes on Schedule A, under "Interest You Paid." You may also have to file Form 4952, which provides details about your deduction.Dec 1, 2022

[Lawrence Duckworth]

File an extension...

[Jim Becker]

File an extension...

And extension is only for filing the "forms", not for paying the tax owed, so it's honestly of little use in most cases.

[Lawrence Duckworth]

And extension is only for filing the "forms", not for paying the tax owed, so it's honestly of little use in most cases.

exactly...he won't be skipping out on paying any taxes, but he'll have more time to find a professional and get it right. My accountant recommends filling an extension every year... go fig'r

[Michael Drew]

I'll be fine. I will do as I always do, be conservative. I found a YouTube channel where a CPA posts tutorials on the various forms and use of TurboTax. Almost like sitting in class. Very helpful. https://www.youtube.com/@JasonDKnott

It looks as if I can claim some mortgage interest, but not all. Some for active income deduction, some for NIT tax, some for basis calculation. None are big, but they all add up.

I'll definitely be thinking about taxes a hell of a lot more the next time I make a major purchase, including the state where I buy it.

[Patty Hann]

Maybe 30 years ago my financial advisor suggested I invest in a petroleum related tax shelter.
Up to that time I was doing my own taxes, but not using Turbo tax because my primitive "stone-knives-and-bear-skins" computer didn't have the capacity to handle TT.
And that was OK because (up until that time) my taxes were pretty easy to do even "long-hand".

So come February of that year I get a statement for said tax shelter investment and have no idea what to do with it.
After reading through all kinds of IRS Pubs, I finally (I think) figure it out.

I do my return and that Tax shelter added about 6 extra forms, all of them requiring at most 2 entries; actually I remember one form needed two entries, the others needed only one entry.
In the end I had avoided paying less than $10 in taxes on that investment.... and it only took me 6 hours of wading through the IRS pubs to figure out how to enter the info.**

So I did two things after I filed:
1) Called my advisor and told him to liquidate the investment, and
2) Found a different advisor

**Apparently I filled out all those extra forms correctly because I never got notified that there was an error, or that I owed any more taxes

[Clifford McGuire]

There are times to hire a tax professional, this sounds like one of them.

Definitely this ^^^^^^^^ . But I can tell you my situation.

In 2019, I sold my Colorado land that was to be used for retirement. I was living and working in another state at the time.

- The gain was taxed (by Colorado) as long term capital gain.
- The interest was not deductable.
- I had to file a Colorado tax return, just for this purpose.
- Colorado wanted their tax money up front, even though I sold the property on land contract and the buyed paid me over three years.

I was glad to have a tax professional handle it.

[Frederick Skelly]

There are times to hire a tax professional, this sounds like one of them.

Yup. ......

[Bill Dufour]

Parts of California have automatic six month extension for the filing deadline. Have to be a in a FEMA disaster zone county to qualify. I think payment is due April 15. Not really sure why my county qualifies? Maybe fires on eastern edge.
Bill D

[Jim Becker]

Tax payment is due 18 April this year, regardless of filing date.

[Jim Koepke]

My accountant recommends filling an extension every year

Some of my friends, family and acquantences insist on doing this every year as a "stick it to the man" kind of protest.

In my case it is better to get it done and enjoy it being over. Plus the California Franchise Tax Board requires some of my income from a trust be withheld. This is always refunded, so there is an incentive to get it over with and done.

jtk

[Ron Citerone]

A wise man once told me the problem with sticking it to the man is the man don’t care.

[Bill Dufour]

My sister's high school french teacher gave all the seniors a F progress report for second semester. I guess she had been burned by previous seniors who could not fail because no progress report had been issued.
Bill D