asked

I have a property bought in the mid-1990s for around $82K, now selling for $335K in California. The first mortgage is around $260K, and with a HELOC, it adds up to more than the selling price, so I'm doing a short sale. The HELOC owner sent Form 593-E to see if California capital gains tax can be reduced so they can get a bigger chunk. My questions are: 1) Is my starting amount for tax purposes $82K, not when I took the HELOC? 2) The major improvement was licensed asbestos removal in 2004 or 2005, paid around $5K then, but now it probably costs $15K. Which amount goes into Form 593-E, and where can I find records? 3) What other types of costs can be added, such as bathroom improvements and recent improvements to get ready to sell? 4) Should costs from 10 years ago be adjusted to today's prices for tax purposes?

November 9th, 2023

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