Contact UsI am looking for every legal way to lower my capitol gains tax. Someone suggested that CPI (customer price index?) could help. I think you are supposed to be allowed to convert the buying price of the building to today's dollar value For example, if a building was bought for $200,000 10 years ago and sold today for $500,000 then first change the $200,000 to $300,000 in today's dollars then deduct from the $500,000 and the tax is a lower $200,000. Yes? Dick
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Tax Professional Answers
Kathryn Morgan
Unfortunately taxes don't work that way. You are not allowed to "gross up" your purchase price by inflation. You can and should add the cost of closing you paid on purchase, any improvements you made while you owned the property and the cost of closing paid on sale to the purchase price. This will lower the gain amount. And since you owned the property for more then a yaer it will be taxed at the lower long term rates.
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595 weeks ago