CHAPTER 21Calculation 15: Sale Proceeds
What It Means
When you sell your investment property, you hope to leave the closing with a check in your pocket. The money you take home is called sale proceeds. To be more precise, it is called before-tax sale proceeds because Uncle Sam is waiting outside for his cut.
Most of our discussion in this book has focused on purchasing and operating an income-producing property, but for many investors, it is the sale of the property that makes the greatest impact. If all has gone according to plan, you are probably recovering your original investment plus the property’s appreciation in value, plus the paydown (amortization) of your mortgage. When it does come time to settle up on your taxes, much of your profit ...