Albuquerque Journal (Albuquerque, NM)

Sale qualifies for new capital-gains rate.(Business Outlook)

Byline: Your Taxes James Hamill For the Journal

Q: I entered into a contract to sell a rental house on April 11, 2003, and the sale is scheduled to close on July 25. I have read that the new tax law sets a 15 percent capital-gains rate for gains after May 5, 2003.

Does my sale qualify for the 15 percent rate?

A. Yes, it should. The new law lowers the rate for capital gains "properly taken into account" after May 5, 2003. Although you entered into a contract to sell before the effective date, title on the property will not pass until after the effective date.

Under general principles of tax law, there is no realization event until the sale closes and title transfers, which will be after the effective date of the lower capital-gains tax. …

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