When the normal person thinks about making money, they think about traditional income streams like wages, tips and other compensation. But there is another way to make money. The sale of a Florida business property or other commercial real estate could result in a profit. This type of income is difference from wage-related compensation and should be treated differently.

Any profits earned by the sale of commercial real estate is also known as capital gains. Capital gains are profits that an individual receives from an appreciation in the value of an investment, like commercial real estate. However, their are other types of income that is attributed to gains like capital gains. These gains are only realized after the sale is completed.

However, it should be noted that capital gains are often subject to a different level of taxation from other income streams. The current maximum tax rate for capital gains is 15 percent of the profits. Those looking at involvement with the sale of a commercial property, if any profits are to be had, the capital gains tax should be considered. Depending on the specifics of the sale of a commercial property, their could be other tax implications involved as well.

Capital gains tax shouldn’t necessarily deter a person from making a commercial real estate transaction. Rather, it should be a factor in the final decision in the sale of commercial real estate. Considering all the factors in a real estate transaction is key to making the best decision. There is a buyer and seller on both sides of a commercial real estate transaction, whatever side you are on, get an idea of your goals and priorities.

Source: FindLaw, “What are Capital Gains?” accessed on Nov. 13, 2017