I sold stock for home improvement, now I have a huge capital gain tax liability. How can I reduce the tax due?
My wife and I have combined taxable income of about $60,000. We have two children, and mortgage deduction. We sold stocks as part of a major renovation of our home. We have capital gains (mostly short term) of about $52,000. A quick run through with Turbo Tax has me owing nearly $20,000 in Federal tax. How can I reduce this, legally?
| Print article | This entry was posted by admin on November 8, 2010 at 3:50 pm, and is filed under Uncategorized. Follow any responses to this post through RSS 2.0. You can leave a response or trackback from your own site. |
about 1 year ago
Nothing, I’m afraid. After the fact or post mortem planning is rarely effective. Shoulda held the stock a year and a day–woulda saved you $12,500.
about 1 year ago
The capital gains should only be 15%. Did you put in the correct bases of the original purchases?
about 1 year ago
Unfortunately, the first answer to this thread is correct. The STCGs are taxable at ordinary rates, and the home improvements are not tax deductible.
about 1 year ago
Its too late now. Short term capital gains are taxable as ordinary income – didn’t you know that? Your renovations are not tax deductible either, though they might change your house cost basis when you eventually sell.
about 1 year ago
You really need to scrutinize your deductions and make sure you are taking advantage of everything possible. Review schedule A for anything/everything you can (medical, charity, unreimbursed employee expenses).
Unfortunately, with short-term gains you will pay more to Uncle Sam.