On Jan 1, 2009, at 8:24 PM, Dan wrote:
> > Yes. In the US at least, the difference between what you sell a home > for and what you paid for it originally is taxed. The amount you > originally paid for it is the starting "basis". As you make > improvements to the home, the cost of those improvements is added to > the basis. When you sell the home, this revised basis is subtracted > from the selling price. Example: > In 2000, you buy the home for $100,000 > In 2001, you have the driveway paved for $5,000. New basis for the > house is $105,000. > In 2009, you sell the house for $150,000. Taxes are due on > $150,000-105,000 = $45,000. > Expenses that do not increase the value of the real estate are not > counted. For example, purchasing a new coffeepot has not impact. > This is simply an accounting that must be done continually when you > own a home. It has no impact on your income or your expenses (until > you sell the home). > To track it in MoneyWell, there would need to be something called > basis, and a checkbox on each transaction that says "Add to basis." > Probably would reflect in a report somewhere. > Dan > Dan, Any chance you're an accountant? I only ask because I work with a whole group of CPAs and they are the only reason I know that I need to track improvements for basis purposes. The reason I generally don't is because I'm not sure I'll ever exceed the built in gain necessary to be taxed as I roll the proceeds forward into the next house. If I remember correctly, the exception is quite high and keeps rising. Sorry for the off-topic response, I was just curious. Patrick --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "No Thirst Software User Forum" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/no-thirst-software?hl=en -~----------~----~----~----~------~----~------~--~---
