Property development as only source of income.
August 7, 2006 4:45pm CST
Am I liable for capital gains tax on all profits. Can the properties that I buy and sell not be treated as any norman commodity such as a car or television etc.
• United States
7 Aug 06
Yes, you would be responsible for capital gains taxes on these types of properties and potentially ordinary income taxes. That depends on whether the proerty development is considered a business or an investment. The more of these transactions you do in a year the more likely it will be treated as a business and thus taxes at ordinary rates. Before you go too far I would suggest you talk to a qualified CPA in your area who is familiar with these types of transactions. As an aside, technically items such as a car and television are capital items and would qualify for capital gains tax if you sold them at a gain. Losses for these items are nondeductible.