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Reinvesting Capital Gains

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RogerC

Junior Member
Arizona. I purchased a parcel of vacant land in June 2006 and then sold it in April 2007. My profit on the sale of the land was $30,000. I paid a realtor $4000 to find the buyer. I have two questions;

1) Do I subtract the $4000 fee from the $30000 before calculating the capital gains tax?
2) I've now used most of the $26,000 to remodel the home I've lived in for 20 years. I remodeled it for the purpose of selling whcih I intend to do soon. Can I use this reinvestment of my profit to reduce the tax I have to pay on the capital gains?
 


abezon

Senior Member
1. yes, as well as any other selling costs, such as title insurance or escrow/legal fees.

2. not a chance. you add the cost of the remodel to your basis in the home when figuring how much profit you made from the home sale.
 

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