"Cherrybounce" <chdavi15[at]hotmail.com> wrote:

- quote -

Uh...no. You got more than you paid for it, did you not?


--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Cherrybounce wrote:

- quote -

Question; To what does the amortization pertain? You
mentioned the building and land, but no improvements.

ChEAr$,
Harlan Lunsford, EA n LA
Sat 4 Feb 2006 18;47

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"Cherrybounce" <chdavi15[at]hotmail.com> writes:

- quote -

No, it's not. First, the mortgage is irrelevant. All that
matters is what you sold the property for, what you paid for
the property, and adjustments like commission and
depreciation.

So if by "on the books for $115,000" you mean that was your
cost (as things like that are generally carried on the books
at cost), your unadjusted basis in the property is $129,000.
But that you have to adjust for depreciation and
amortization which will bring your basis down by $14,711 +
$2,300, reducing it to $111,989.

Then you sold for $240,000 less a $10,000 commission for net
proceeds of $230,000. Subtracting $111,989 from $230,000
results in a gain of $118,011. $101,000 of that will be a
normal capital gain. The rest of it will likely be ordinary
income from the depreciation recapture or may be special 25%
rate capital gain depending on whether or not you used
accelerated depreciation. I will leave it to my betters to
discuss that exact breakdown :-).

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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Cherrybounce wrote:

- quote -

No, let's do the math:

Calculate your "cost basis" as ($115,000 + 14,000 - 14711 -
2,300) = $111,989

Calculate your net sales price as ($240,000 - 10,000) =
$230,000

$230,000 - 111,989 = $119,011 capital GAIN.

Your mortgage has NOTHING to do with any calculations of
gain or loss.

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"Cherrybounce" <chdavi15[at]hotmail.com> wrote:

- quote -

First the easy parts. The commission is a valid expense of
sale, and ignore everything about the mortgage. The
mortgage is irrelevant in determining your gain or loss.

What matters is your "basis," and it's impossible to tell
from the information provided. See IRS Publications 550 and
551.

--
Phil Marti
Clarksburg, MD

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Cherrybounce wrote:

- quote -

Proceeds = $240,000 - 10,000 = $230,000
Basis = $115,000 + 14,000 - 14,711 - 2,300 = $111,989
Realized Gain = $230,000 - 111,989 = $118,011

The mortgage is irrelevant to the computation of taxable
gain. Also, I assume that $115,000 is what you paid for the
building. If not, change that amount about and redo the
computations.

Good luck.
Bill

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Cherrybounce <chdavi15[at]hotmail.com> wrote:

- quote -

If I understand right, you bought the building + land for
$143,711, with a mortgage of $92,300. Since then, you have
depreciated the building $14,711, and amortized $2300 on the
mortgage.

I'll note that the mortgage is irrelevant in calculating
gain or loss.

- quote -

You sold the building + land for $230,000 net (the
commission came off your proceeds). You recapture $14,711
in depreciation, and show a gain (in addition to that) of
86,289.

- quote -

I should have such losses.

Seth

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"Cherrybounce" <chdavi15[at]hotmail.com> wrote:

- quote -

Let's see: $115,000 + $14,000 - $14,711 = $114,289

- quote -

Continuing: $240,000 - $ 10,000 = $230,000
$230,000 - $114.289 = $115,711

There isn't enough information to determine whether the
accoumulated amortization is a debit or a credit. So your
CAPITAL GAIN is $115,711 +/- $2,300.

The mortgage is irrelevant. You bought a building w/land
for $129,000, deducted $14,711 from your income as
depreciation, and sold it for $230,000 (net). Plus it
looks like you only held it for 2-3 years and you only paid
4.125% commission (nice job). And you want to call it a loss?

Dick

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I have a building that is on the books for $115,000, land of
$14,000, accumulated depreciation of 14,711, accumulated
amortization of $2,300, and a mortgage due on the building
of $90,000.

I sold the building for $240,000, less the mortgage, which
they assumed. (in other words, I netted $150,000). I had
$10,000 in commissions.

Is this a loss?

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