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View Diary: Mitt Romney: It's fair I pay a lower tax rate than people making $50,000 (348 comments)

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  •  You do not pay the full 15 percent (4+ / 0-)
    Recommended by:
    delphine, 714day, terjeanderson, royce

    Any money that you have put into the property for improvements, all the utility bills and all local taxes are deducted from the "profit" prior to deducting the 15 percent.  but there are many many examples.

    there is only one reality, republicans just forget at times

    by Bloke on Sun Sep 23, 2012 at 08:21:13 PM PDT

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    •  That's not correct (3+ / 0-)
      Recommended by:
      diffrntdrummr, Samer, Asak

      Improvements are indeed deducted from the sale price, but utility bills and local taxes are deducted from the property's rental income (assuming it's investment property, rather than where you live), rather than from the sale price.  And if it's where you live, utility bills aren't deductible at all, and real estate taxes are deductible from your ordinary income in the year in which you pay them.

      Bin Laden is dead. GM and Chrysler are alive.

      by leevank on Sun Sep 23, 2012 at 09:08:02 PM PDT

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      •  actually, he could be correct (0+ / 0-)

        If the property was a flip, as he said, , and it was improved but not rented, then it is a short  or long term capital gain, and, as an investment (with no rental income), all the expenses of the flip are deductable against the capital gain.  Usually, it is preferential to deduct the utilities against rental income, since rental income is taxed as ordinary income and capital gains may be at a lower rate.

        As my father used to say,"We have the best government money can buy."

        by BPARTR on Mon Sep 24, 2012 at 12:19:40 AM PDT

        [ Parent ]

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