Calculating Capital Gains On Second Home

Question: We are selling a cottage (second home) on Lake Michigan which we have owned for 35 years. How should we figure capital gains?

Answer: When you sell the cottage, your capital gains tax will be computed exactly the same as the gain on any other asset. You subtract your basis (probably your purchase price and capital improvements made) from the selling price to calculate your gain. You then apply the capital gains tax rate. Good luck on the transaction, if we can help you with the deed, let us know. We prepare legal documents and email them to title companies for closing throughout much of Michigan.