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Sold house/tax question
Posted on 6/13/23 at 3:55 pm
Posted on 6/13/23 at 3:55 pm
Just sold my first home (we were renting it). I’m going to net about $180,000 after paying note. I purchased at $155,000. That would only be a capital gain of $25,000, correct?
I’m asking because if I 1031 exchange the entire $180,000 into a new property, would I end up paying taxes on the whole $180,000 later versus just the $25,000?
Just seeing if others have had any issues doing this before.
I’m asking because if I 1031 exchange the entire $180,000 into a new property, would I end up paying taxes on the whole $180,000 later versus just the $25,000?
Just seeing if others have had any issues doing this before.
This post was edited on 6/13/23 at 3:56 pm
1
Posted on 6/13/23 at 9:56 pm to Drizzt
quote:
I’m going to net about $180,000 after paying note. I purchased at $155,000. That would only be a capital gain of $25,000, correct?
Your net after paying note is irrelevant.
Whatever the total purchase price you sold the home for is your proceeds minus your $155k purchase price minus any capital improvements will be your capital gain. Also if you’ve been renting it, then you likely have depreciation recapture on any depreciation you took as a deduction.
If you 1031, essentially the basis of your old property becomes the basis of the new property. (Can get more complicated but just to keep it simple)
When’s the last time you lived in it?
This post was edited on 6/13/23 at 10:00 pm
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