Spas Florida

would i have to pay any capital gains taxes for selling my Villa in florida?

Would i have to pay any capital gains taxes for selling my Villa in orlando florida. I bought it five years ago for $270.000 and will be selling it for approx $180.000 and it has been running at a loss over the past five years. also is there any benifits I can claim for my loss.

Public Comments

1. You only pay capital gains if you have a gain. If the property is an investment property, and you have been deducting depreciation from your taxable income every year, you would have to reduce your basis for purposes of determining whether you have a gain. However, there is no way you could have depreciated the property by $90,000 in five years, so I would say you have no capital gains.
2. No gain ,no tax , you are only taxed on profits and income
3. You only pay taxes on profits or earnings. Your real estate loss is neither. You get to write off certain losses. Refer to your accountant for specifics. But conceptually, you should be able to write off a certain amount of the loss each year until it's exhausted, assuming you have taxes from other income you can offset. Good Luck
4. well, the US taxes your realized capital gain, which would be your sale price less the cost basis [and the basis is your cost less the amounts of depreciation allowable for the five years]. the cost would have to be divided between the land and the building and then depreciation taken on the building. a reasonable approach would be to assign the land the same proportion of the cost as the local tax assessor assigned to land versus building value in the year you purchased it. Off hand and without doing a proper job of the analysis, I'd guess that your cost basis, even after reducing it for depreciation, is higher than the amount you received. If so, there would be no US tax liability. As to possible tax benefits from the likely loss for US tax purposes, that depends on your other US taxable income and the documented use to which you put the property over the years. If you do not have reasonable documents to support the contention that the property was a rental and intended to make money, the American IRS will refuse you any benefits at all. Florida does not have income taxes for individuals or families, so there is no tax there. As to UK taxes -- I haven't a clue.
5. If you live in the UK, you are taxed on capital gains made anywhere in the world.The loss you make here can be offset against other capital gains & carried forward until used up.
6. As you are in the UK, I presume you would be classed as a non resident seller of the property. On the sale document, you are required to disclose this and the buyer is forced to withold 30% of the sale proceeds from you. This can then be claimed back from the US as clearly there are no capital gains. Then in the UK you will need to file your return showing the sterling amounts at the time of purchase and sale. Your profit or loss in the UK will depend on that number, not the dollar number.