What will be the capital gains tax after we sell a rental home?
This will be a complex issue and you will need to sit down with a professional to work through the issues: When the house was put up for rent the initial year tax forms should have required that the value of the house/property be calculated. This number was then used for depreciation of the house. This was made more complex based on any capital improvements. If the house wasn't the first he owned, then capital gains might have been rolled over from previous houses which adds a layer of complexity.  Any capital improvements while the house was a rental will also have to be resolved because those were also depreciated since they were placed in service. The deprecation will be recaptured and will be a part of the calculation. You have nowhere near enough info to make a calculation at this time.
"Yes, you're correct and yes they will. Note that it will be considered as ""sale"" with gains being taxable income to you." "Are these all of the taxes or is there any additional taxes over these? Turn-over tax is not for retail investors. Other taxes are paid by the broker as part of transaction and one need not worry too much about it. Is there any ""Income tax"" to be paid for shares bought/holding shares? No for just buying and holding. However if you buy and sell; there would be a capital gain or loss. In stocks, if you hold a security for less than 1 year and sell it; it is classified as short term capital gain and taxes at special rate of 15%. The loss can be adjusted against any other short term gain. If held for more than year it is long term capital gain. For stock market, the tax is zero, you can't adjust long term losses in stock markets. Will the money received from selling shares fall under ""Taxable money for FY Income tax""? Only the gain [or loss] will be tread as income not the complete sale value. To calculate gain, one need to arrive a purchase price which is price of stock + Brokerage + STT + all other taxes. Similar the sale price will be Sales of stock - Brokerage - STT - all other taxes. The difference is the gain.  Will the ""Dividend/Bonus/Buy-back"" money fall under taxable category? Dividend is tax free to individual as the company has already paid dividend distribution tax. Bonus is tax free event as it does not create any additional value. Buy-Back is treated as sale of shares if you have participated. Will the share-holder pay ""Dividend Distribution Tax""? Paid by the company. What is ""Capital Gains""? Profit or loss of buying and selling a particular security." I don't see anything in this forum on the leverage aspect, so I'll toss that out for discussion.  Using generic numbers, say you make a $10k down payment on a $100,000 house. The house appreciates 3% per year. First year, it's $103,000. Second year, $106090, third it's 109,272.70. (Assuming straight line appreciation.) End of three years, you've made $9,272.70 on your initial $10,000 investment, assuming you have managed the property well enough to have a neutral or positive cash flow. You can claim depreciation of the property over those rental years, which could help your tax situation.   Of course, if you sell, closing costs will be a big factor. Plus... after three years, the dreaded capital gains tax jumps in as mentioned earlier, unless you do a 1031 exchange to defer it. The capital gain is either short-term or long-term and will be indicated on the 1099-DiV. You pay taxes on this amount as the capital gain was received in a taxable account (assuming since you received a 1099-DIV). More info here: https://www.mutualfundstore.com/brokerage-account/capital-gains-distributions-taxable Your question is best asked of a tax expert, not random people on the internet. Such an expert will help you ask the right questions.  For example you did not point out the country or state in which you live.  That matters.   First point is that you will not pay tax on 60K, its expensive to transact real estate, so your net proceeds will be closer to 40K.  Also you can probably the deduct the costs of improvements. You implied that you really like this rental property.  If that is the case, why would you sell...ever?  This home could be a central part of your financial independence plan.  So keep it until you die.  IIRC when it passes to your heirs, a new cost basis is formed thereby not passing the tax burden onto them. (Assuming the property is located in the US.) To start, I hope you are aware that the properties' basis gets stepped up to market value on inheritance.  The new basis is the start for the depreciation that must be applied each year after being placed in service as rental units. This is not optional. Upon selling the units, depreciation is recaptured whether it's taken each year or not. There is no rule of thumb for such matters. Some owners would simply collect the rent, keep a reserve for expenses or empty units, and pocket the difference. Others would refinance to take cash out and leverage to buy more property. The banker is not your friend, by the way. He is a salesman looking to get his cut. The market has had a good recent run, doubling from its lows. Right now, I'm not rushing to prepay my 3.5% mortgage sooner than it's due, nor am I looking to pull out $500K to throw into the market.  Your proposal may very well work if the market sees a return higher than the mortgage rate. On the flip side I'm compelled to ask - if the market drops 40% right after you buy in, will you lose sleep?  And a fellow poster (@littleadv) is whispering to me - ask a pro if the tax on a rental mortgage is still deductible when used for other purposes, e.g. a stock purchase unrelated to the properties.   Last, there are those who suggest that if you want to keep investing in real estate, leverage is fine as long as the numbers work. From the scenario you described, you plan to leverage into an already pretty high (in terms of PE10) and simply magnifying your risk. When you sell the spec home, you will owe taxes on the sales price minus the cost of the home, including the land, materials, paid labor, and other expenses. The fact that you pay for this with with the inheritance in the money market account won't affect the taxes you owe when you sell the spec house. "Appreciation of a Capital Asset is a Capital Gain.   In the United States, Capital Gains get favorable tax treatment after being held for 12 months. From the IRS newsroom: Capital gains and losses are   classified as long-term or short-term,   depending on how long you hold the   property before you sell it. If you   hold it more than one year, your   capital gain or loss is long-term. If   you hold it one year or less, your   capital gain or loss is short-term. The tax rates that apply to net   capital gain are generally lower than   the tax rates that apply to other   income. For 2009, the maximum capital   gains rate for most people is15%. For   lower-income individuals, the rate may   be 0% on some or all of the net   capital gain. Special types of net   capital gain can be taxed at 25% or   28%. The IRS defines a Capital Asset as ""most property you own"" with a list of exclusions found in Schedule D Instructions.  None of the exclusions listed relate to Bond ETFs." In no ways. Both will be reported to the members on their K1 in the respective categories (or if it is a single member LLC - directly to the individual tax return). The capital gains will flow to your personal Schedule D, and the business loss to your personal Schedule C. On your individual tax return you can deduct up to 3K of capital losses from any other income. Business loss is included in the income if it is active business, for passive businesses (like rental) there are limitations. "In 2014 the IRS announced that it published guidance in Notice 2014-21. In that notice, the answer to the first question describes the general tax treatment of virtual currency: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. As it's property like any other, capital gains if and when you sell are taxed. As with any capital gains, you're taxed on the ""profit"" you made, that is the ""proceeds"" (how much you got when you sold) minus your ""basis"" (how much you paid to get the property that you sold). Until you sell, it's just an asset (like a house, or a share of stock, or a rare collectible card) that doesn't require any reporting. If your initial cryptocurrency acquisition was through mining, then this section of that Notice applies: Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities? A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income. That is to say, when it was mined the market value of the amount generated should have been included in income (probably on either Line 21 Other Income, or on Schedule C if it's from your own business). At that point, the market value would also qualify as your basis. Though I doubt there'd be a whole lot of enforcement action for not amending your 2011 return to include $0.75. (Technically if you find a dollar bill on the street it should be included in income, but usually the government cares about bigger fish than that.) It sounds like your basis is close enough to zero that it's not worth trying to calculate a more accurate value. Since your basis couldn't be less than zero, there's no way that using zero as your basis would cause you to pay less tax than you ought, so the government won't have any objections to it.  One thing to be careful of is to document that your holdings qualify for long-term capital gains treatment (held longer than a year) if applicable. Also, as you're trading in multiple cryptocurrencies, each transaction may count as a ""sale"" of one kind followed by a ""purchase"" of the other kind, much like if you traded your Apple stock for Google stock. It's possible that ""1031 like kind exchange"" rules apply, and in June 2016 the American Institute of CPAs sent a letter asking about it (among other things), but as far as I know there's been no official IRS guidance on the matter. There are also some related questions here; see ""Do altcoin trades count as like-kind exchanges?"" and ""Assuming 1031 Doesn't Apply To Cryptocurrency Trading"". But if in fact those exchange rules do not apply and it is just considered a sale followed by a purchase, then you would need to report each exchange as a sale with that asset's basis (probably $0 for the initial one), and proceeds of the fair market value at the time, and then that same value would be the basis of the new asset you're purchasing. Using a $0 basis is how I treat my bitcoin sales, though I haven't dealt with other cryptocurrencies. As long as all the USD income is being reported when you get USD, I find it unlikely you'll run into a lot of trouble, even if you technically were supposed to report the individual transactions when they happened. Though, I'm not in charge of IRS enforcement, and I'm not aware of any high-profile cases, so it's hard to know anything for sure. Obviously, if there's a lot of money involved, you may want to involve a professional rather than random strangers on the Internet. You could also try contacting the IRS directly, as believe-it-or-not, their job is in fact helping you to comply with the tax laws correctly. Also, there are phone numbers at the end of Notice 2014-21 of people which might be able to provide further guidance, including this statement: The principal author of this notice is Keith A. Aqui of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information about income tax issues addressed in this notice, please contact Mr. Aqui at (202) 317-4718" Here's how capital gains are totaled: Long and Short Term. Capital gains and losses are either long-term or   short-term. It depends on how long the taxpayer holds the property. If   the taxpayer holds it for one year or less, the gain or loss is   short-term. Net Capital Gain.  If a taxpayer’s long-term gains are more than their   long-term losses, the difference between the two is a net long-term   capital gain. If the net long-term capital gain is more than the net   short-term capital loss, the taxpayer has a net capital gain. So your net long-term gains (from all investments, through all brokers) are offset by any net short-term loss.  Short term gains are taxed separately at a higher rate. I'm trying to avoid realizing a long term capital gain, but at the same time trade the stock. If you close in the next year, one of two things will happen - either the stock will go down, and you'll have short-term gains on the short, or the stock will go up, and you'll have short-term losses on the short that will offset the gains on the stock.  So I don;t see how it reduces your tax liability.  At best it defers it. "I was told by the lawyers there was no tax consequence because the two   numbers were the same. That is correct. However, a tax professional tells me that since the start-up stock was   ""realized"" there invokes a taxable event now. That is correct. I'm now led to believe I owe cap-gains tax on the entire 4 year vest   this year That is incorrect. You owe capital gains tax on the sale of your startup stock. Which is accidentally the exact same amount you ""paid"" for the new unvested stocks. There's no taxable event with regards to the new stocks because the amount you paid for them was the amount you got for the old stocks. But you did sell the old stocks, and that is a taxable event." Ah, I did some more research and apparently Rental Income is considered Passive Income, and as such the IRS does not allow a net loss to exist, but you can carry the loss over into the next year. https://www.irs.gov/taxtopics/tc425.html Generally, losses from passive activities that exceed the income from passive activities are disallowed for the current year. You can carry forward disallowed passive losses to the next taxable year. A similar rule applies to credits from passive activities. So in the event in a loss on my rental business activity, I simply pay no tax on it, and deduct the remainder in income in 2017 from taxes. I don't make any changes to my Consulting income at all. If it is US, you need to take tax implications into account.  Profit taken from sale of your home is taxable.  One approach would be to take the tax hit, pay down the student loans, rent, and focus any extra that you can on paying off the student loans quickly.  The tax is on realized gains when you sell the property.  I think that any equity under the original purchase price is taxed at a lower rate (or zero).  Consult a tax pro in your area. Do not blindly assume buying is better than renting.  Run the numbers.  Rent Vs buy is not a question with a single answer.  It depends greatly on the real estate market where you are, and to a lesser extent on your personal situation.  Be sure to include maintenance and HOA fees, if any, on the ownership side.  Breakeven time on a new roof or a new HVAC unit or an HOA assessment can be years, tipping the scales towards renting.  Include the opportunity cost by including the rate of return on the 100k on the renting side (or subtracting it on the ownership side).  Be sure to include the tax implications on the ownership side, especially taxes on any profits from the sale. If the numbers say ownership in your area is better, then try for as small of a mortgage as you can get in a growing area.   Assuming that the numbers add up to buying:  buy small and live frugally, focus on increasing discretionary spending, and using it to pay down debt and then build wealth. If they add up to renting, same thing but rent small. Loans are not taxable events. The equity you took out is not income. It's a loan, and you pay it back with interest. You pay taxes on the capital gain of the home when you sell it. The tax does not take into account any mortgages, HELOCs, or other loans secured by the house. Instead the tax is calculated based on the price you sold it for, minus the price you bought it for, which is known as the capital gain. You can exclude $250k of that gain for a single person, $500k for a married couple. (There are a few other wrikles as well.) That would be true regardless of the loan balance at the time.