Found 2 blog entries tagged as Tax.


What Are Capital Gains?

Capital gains refer to the profit you make when you sell a property for more than you paid for it. Similar to selling stocks, the gain is the difference between the purchase price and the sale price. However, real estate has unique considerations. For example, the original price includes the cost of certain improvements, so keeping receipts for renovations is essential.

How to Calculate Capital Gains on Real Estate

Capital gains in real estate are based on the adjusted cost basis of your property rather than the purchase price alone. Here's how to calculate it:

  1. Start with the Purchase Price
    This is the total amount the property sold for, not just the cash you brought to the closing table.

  2. Add the…

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Tax Considerations When Selling  

As you explore the possibility of selling your property, it's essential to be aware of the various tax considerations that may impact your transaction. Capital gains along with two important regulations to understand are HARPTA (Hawaii Real Property Tax Act) and FIRPTA (Foreign Investment in Real Property Tax Act). Below, I've outlined key information about these withholdings to help you navigate the selling process smoothly.

Capital Gains Tax

When selling your home, one financial consideration to keep in mind is the capital gains tax. This tax is imposed on the profit you make from the sale of your property. To calculate your capital gains, subtract the property's purchase price (adjusted basis) from the…

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