| When you buy a real estate in Maryland and sell it for | | | | paid by the seller, registration fees, cost of stamp |
| a higher price, the difference between the selling price | | | | papers, traveling and litigation expenses incurred while |
| and the purchase price is known as capital gain. In | | | | transferring the real estate property in Maryland. |
| other words, profit from selling a property for a higher | | | | Capital gains tax: |
| price is the capital gain on the property. Capital gains | | | | Capital gains tax is charged on the gain that you make |
| may be short-term or long-term. | | | | on selling a real estate for profit in Maryland. It is |
| Short-term gain: If you sell your property within 3 years | | | | calculated by subtracting the cost of acquisition of real |
| after purchasing it, the gain is called short-term capital | | | | estate from the transfer price of the property. The |
| gain. | | | | difference is added to your taxable income and |
| Long-term gain: When a gain occurs from selling a | | | | charged according to the tax bracket you fall into. |
| property after 3 years of its purchase, it is a long-term | | | | The tax rates for short-term and long-term capital |
| capital gain. | | | | gains are often different. You must be alert of the tax |
| Calculation of capital gain: Capital gain is the difference | | | | structure of Maryland to know what tax bracket you |
| between the selling price or the transfer price and the | | | | fall under and what tax rates are applicable for your |
| total cost of acquisition of the property. | | | | capital gains. |
| The cost of acquisition includes purchase price of the | | | | Criticism: It is often argued that capital gains tax results |
| property, cost incurred in registration of the real estate | | | | in double payment of taxes. The property's value that |
| property in Maryland, its repairs, storage expenses, etc. | | | | is sold might have been included in the value of assets |
| In short, all the expenses of capital nature are part of | | | | sold by you while calculating wealth tax. Thus, including |
| the cost of acquisition. | | | | capital gain in the income tax statement in the same |
| The transfer price includes commission or brokerage | | | | year may result in double-payment of taxes. |