Contributed By McGuireWoods LLP
Gains generated from the sale of real estate are typically subject to a 20% federal capital gains tax. The gains may also be subject to tax at the state and local level, where the rates vary greatly among the states and municipalities. At the state and local level, the sale or purchase of real estate may also be subject to a transfer tax, unless any exemptions apply. Parties often negotiate to determine who will bear the transfer tax costs, as they may be significant in certain jurisdictions.
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