Most Dispised Day in USA

If from my title you guessed "Tax Day", you are correct. For the first time ever, I actually had to pay taxes (both Federal and State) because of the infamous "Capital Gains Tax". As you may recall from an earlier post (last November, I believe), I bought some 'raw land' back in 2003 and sold it late last year (Nov. 2007) for a "nice" profit. Since I did make a profit on the sale, Uncle Sam stuck-out his grubby little paws and said "Give me nearly half of your profit."

I'd call them "children of un-wed mothers", but I'm nicer than that. Usually.

My CPA did a rough calculation of the difference in taxes for me if I had not sold the land and I would have received a REFUND in an amount nearly the same as what I ended up having to pay. Which is why I loathe the Capital Gains Tax and believe it should be abolished. Or at least severely overhauled to be less punitive.

Now, my good and dear friend Hcatty (who happens to know a little bit about real estate, having been heavily involved in a realtor-ship with her family [and now that she has her own tanning salon business with her sister Giggles, I don't know how involved she may still be with the realtor-ship]) left a response on my original tirade post that I could have deferred the tax by re-investing. Which is true. Sort of.

From what I understand, the re-investment must be of "like kind"; meaning, in this instance, since the original property was "raw land", my re-investment would have needed to also be "raw land". I could not, for instance, re-invest it in an apartment building or house and still defer the taxes.

So while I appreciate her letting me know about re-investing (which I did know, but I still thank you, my friend), it didn't really apply in my case.

Not to mention that the sale actually happened pretty fast, once the buyer and I got together (which was a good thing), so I didn't really have the time to re-invest as I wasn't even looking when the sale occurred.

Ah well.

So no refund for me this year. Bummer. But I didn't have to pay as much as I feared, so I still have some profit left over. And I already bought my new, 46-inch LCD big-screen TV last year, so I'm not sure what I would have done with it except put it in savings (at least for a while) anyway.

Now if I could only find a good non-subscription required DVR system...
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PS Hcatty ('cuz I know you will [eventually] read this): I'm now "3-up" on you. Better get cracking. Hehehe.