Question Details

Sophie Rosen…, Other/Just Looking in Brooklyn, NY

What is the tax rate on buyouts?

Asked by Sophie Rosenblatt, Brooklyn, NY Tue Jul 31, 2007

My East Village building was sold. I have a rental apartment and the new owner wants to offer me a buyout. If I take it, is this subject to tax as regular income or is it considered capital gains?

Help the community by answering this question:


Talk with a CPA immediately. If you have a lease, or lease rights, the reason they are buying you out is to make more money.
If they are making more money...then the IRS might come back. I am NOT a tax advisor. But I would obtain good counsel.
0 votes Thank Flag Link Tue Jul 31, 2007
Keith Sorem, Real Estate Pro in Glendale, CA
Capital gains would only apply if you owned the property. The IRS would consider the buyout as income, but consult your accountant there may be something in the IRS code that may exclude the buyout from income.
0 votes Thank Flag Link Tue Jul 31, 2007
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