Real Estate Information

Luxury Real Estate Information


Rancho Palos Verdes, California Homes
Palos Verdes, California Homes
South Bay, California Homes
Luxury Mexican Beachfront Homes

Featured Properties


Oceanfront Estate Near Trump National

Related Information


Loan Information
Real Estate Information
Mortgage Refinance Information

Real Estate Investing - Basis Explained


Our complex IRS code requires that your, as a real estate investor,accurately calculate your "basis" in investment property when reportinga gain or loss on a tax return.

Your monetary gain or loss when you sell investment property is determined by comparing the sale price to the adjusted basis in the property.

Your original basis is determined by the way the propertywas acquired -- whether through purchase, in trade, or received as a gift or inheritance.

We will briefly cover how you determine basis in an investment property you have purchased.

The original basis is determined by adjustments in the total cost of the purchase.

The adjustments include depreciation, or additions, such as capital improvements... perhaps you added a room.

If the total purchase price of the property (including all closing costs) was $100,000... your basis was $100,000.

Later you added a room at a cost of $20,000... your new basis is $120,000. Still later you replaced the roof at a cost of $8,000... your new basis is $128,000.

Adjusted basis is the new basis after additions or deductions to the original basis have been made.

The basis of purchased property is the purchase price plus other expenses such as installation of upgrades, option premiums paid, and other expenses of buying the property.

The basis of land includes the purchase price plus legal and recording fees, abstract fees, survey costs, and payments for non-depreciable permanent improvements.

When property is improved the basis is the total cost of the construction. This cost is not taken as an expense in the year of construction. The cost becomes the basis of the property.

Depreciation is calculated on the property's basis.

When sell your investment property an Adjusted Basis is used in calculating capital gain or loss.

Adjusted basis reflects increases or decreases in the value of the property during the period you owned it. Increases in basis come from improvements that add to the property's value.

Decreases in basis come from depreciation, casualty loss, and other reductions in the value of the property.

Adjusted basis is not a result of inflation and change in the market value of your property. They would only effect market value.

Increases in basis come from improvements to your property that have a useful life of more than one year. Generally the cost of improvements which add to the basis include supplies andmaterials purchased for major repairs or additions, legal fees, recording fees, and similar charges.

Calculating adjusted basis can get very complicated. It is best left to an accountant with real estate experience.

The IRS offers a detailed treatment of basis here:www.irs.gov/pub/irs-pdf/p551.pdf

About The Author -

Mark Walters is an investor and author. His publications can be found at http://www.CashFlowInstitute.com


MORE RESOURCES:

Los Angeles Times

China to limit overseas investments in real estate, sports
Los Angeles Times
China's government is moving to curb domestic companies' investments abroad in property, sports, entertainment and other fields, following a series of high-profile, multibillion-dollar acquisitions by Chinese firms. A document released Friday by the ...
China cracking down on investments in sports clubs, real estate, entertainment, pornography and military technologyShanghaiist
China to limit overseas investments in real estate, sports clubsXinhua

all 32 news articles »


Real estate transactions for Sunday, Aug. 20, 2017
TribDem.com
Deborah A. Christofes from Jacqueline Bodenschatz Morrison, by attorney-in-fact, property in Westmont Borough, $65,000. Mitchell Wilson Jr. from S2C LLC, property in Richland Township, $181,000. Kayla Kukenberger Rubis from Telford W. Allison, property ...



Real estate records, 08/20/17
Lincoln Journal Star
Anderson, Adam M & Craig E & Brenda J to Fosket, Shad A & Tina L, 2301 Dudley St., $90,000. Anderson, Christopher L to Hargrave, Andrew J, 1410 Cheyenne St., $112,600. Anderson, Michael J & Roseann to Marron, Mary B, 6400 Ashbrook Dr., $500,000.



Crain's Cleveland Business

Frank Sinito has sky-high hopes for real estate portfolio
Crain's Cleveland Business
That's also how the native Clevelander went from humble beginnings to launching the highly regarded Lockkeepers restaurant to growing an apartment-based real estate empire with 24,000 suites in 26 states. Now the company is so large that it hosts an ...



USDA reports farm real estate, cropland value in Iowa has increased this year
The Daily Nonpareil
SHENANDOAH — Good news when it comes to Iowa farmland and buildings on farms, according to the United States Department of Agriculture Land Values 2017 Summary. The United States farm real estate value, a measurement of the value of all land and ...



CNBC

Christie Brinkley to sell $50 million worth of Hamptons real estate
CNBC
The three-story colonial mansion was built in 1843 by a whaling captain. It still features much of its original carpentry, including the wide-plank floors, oak banister and multiple fireplaces. Brinkley purchased the four-bedroom residence in 2004 and ...



How to nail the real estate post-close follow-up process
Inman.com
You found your buyers the perfect house and helped them write a winning offer. You held their hand through the inspection and appraisal and getting that earnest money check from point A to point B; you were there when they signed their names a hundred ...



OCRegister

Allen Buchanan: What's the MOST important part of a commercial real estate investment?
OCRegister
I believe the income stream is the MOST important part of a commercial real estate investment — otherwise, you don't have an investment, you own an empty building. A commercial real estate investor considers many aspects of his investment. The ...



Texas real estate company buys a big piece of Colorado Springs homebuilder
Colorado Springs Gazette
A deal between a longtime Colorado Springs homebuilder and a Texas real estate company could signal changes in the local homebuilding industry. Privately owned Challenger Homes, one of the area's larger residential builders, has taken the first step ...



Real estate transfers: Reported Aug. 20, 2017
Herald-Whig
Dustin Eugene Hoffman, Sara J. Hoffman and Sara J. Schaller, residence at 927 S. 22nd St., to Olivia L. Stotts. Arlene R. Heck, residence at 1211 Boulder Court, to Brian R. Snyder and Diane M. Snyder. Marta E. Hayner and Marta E. Minnick Huneke ...


Google News

home | site map
© 2006 TIGER MEDIA