Taxes on income can be heavy on many individuals. Investments may feel even more burdensome. After all, the self-employed middle class tax rate exceeds 40% (in 2010) leaving less than 60% to live on and then invest.
When this money is invested into a piece of property, it may be lost. If a profit is gained upon the sale of the land, building, or home, it will be subject to capital gains tax. The following is an explanation of US capital gains rates in real estate and ways to avoid them.
Capital Gains Tax Rates
Short-term investments are those that are purchased and cashed out in less than a year. Any money made on these kinds of investments are taxed at a person's normal income tax rate minus taxes that apply to payroll.
