- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Is anyone here an expert on depreciation of rental property after it's sold?
Posted on 2/13/17 at 9:57 am
Posted on 2/13/17 at 9:57 am
I'm trying to do my taxes with Turbotax and it's asking for the total depreciation of the property, which is a condominium, over 8 years
I bought the property for $85,900 in 2001. I sold it this year for $110,000.
It's been a rental since 2008.
After doing some research, it looks like it is around $27,000, which is a lot to pay taxes on when I only made $24,100 through the sale.
I didn't deduct the closing costs and realtor fees yet so it will go down about $5000.
So adding everything up, minus some deductions I still have, it looks like I have to pay taxes on over $40k.
Does that seem correct?
Any help would be greatly appreciated.
I bought the property for $85,900 in 2001. I sold it this year for $110,000.
It's been a rental since 2008.
After doing some research, it looks like it is around $27,000, which is a lot to pay taxes on when I only made $24,100 through the sale.
I didn't deduct the closing costs and realtor fees yet so it will go down about $5000.
So adding everything up, minus some deductions I still have, it looks like I have to pay taxes on over $40k.
Does that seem correct?
Any help would be greatly appreciated.
4
Posted on 2/13/17 at 10:14 am to SnukaD
Did you take those depreciation deductions in past years???
Your basis in the property isn't what you paid for but what you paid minus the depreciation you deducted.
Put simply:
86-27(dep)=basis
110-New Basis=taxable income
Your basis in the property isn't what you paid for but what you paid minus the depreciation you deducted.
Put simply:
86-27(dep)=basis
110-New Basis=taxable income
This post was edited on 2/13/17 at 10:18 am
Posted on 2/13/17 at 10:19 am to ODP
Yes, I believe so, but I'm not sure. When I look at the depreciation form in turbotax, it says prior depreciaiton is around 24k and this year it's around 3.2k.
Do you know how to tell if I did take them? I'm assuming I did.
Do you know how to tell if I did take them? I'm assuming I did.
Posted on 2/13/17 at 10:21 am to SnukaD
Check out schedule E on your past returns, there is a line for depreciation.
Posted on 2/13/17 at 10:22 am to ODP
Thanks ODP!
Posted on 2/13/17 at 10:24 am to SnukaD
Also, make sure you are detailing out EVERYTHING you put into it to minimize the impact.
Posted on 2/13/17 at 10:25 am to ODP
I remodeled and had a bunch of repairs that I deducted in that specific tax year.
I assume I can't deduct those again?
I assume I can't deduct those again?
Posted on 2/13/17 at 10:29 am to SnukaD
No, but you can deduct anything out of pocket for the sale. Advertising, commissions, pre-sale repairs, travel, etc.
Posted on 2/13/17 at 10:36 am to ODP
Ok, and I add that to the basis to lower my tax burden?
Turbotax really doesn't ask for any details, just the total sales price, tax basis(plus expenses of sale) and depreciation.
Oh and what about the expenses from the purchase of the property in 2001?
Turbotax really doesn't ask for any details, just the total sales price, tax basis(plus expenses of sale) and depreciation.
Oh and what about the expenses from the purchase of the property in 2001?
This post was edited on 2/13/17 at 10:37 am
Posted on 2/13/17 at 10:37 am to SnukaD
The idea is that you have to reduce your basis by any depreciation deductions you took previously.
Posted on 2/13/17 at 11:11 am to SnukaD
quote:
Ok, and I add that to the basis to lower my tax burden?
Turbotax really doesn't ask for any details, just the total sales price, tax basis(plus expenses of sale) and depreciation.
Oh and what about the expenses from the purchase of the property in 2001?
"Expenses of sale" should include all the incidentals that occurred in selling the house.
Hopefully, you deducted all the purchase expenses in 2001. :)
Posted on 2/13/17 at 12:51 pm to ODP
It's been so long I have no idea if I did. I guess I have to assume I did.
Thanks ODP
Thanks ODP
Posted on 2/13/17 at 1:22 pm to SnukaD
This will answer your question. LINK
you can deduct a property 1/27th each year, The article says it's automatic. Once you sell it, you have to pay 25% on the price you depreciated, and 10% on the capital gains for selling at a profit. You can avoid the capital gains by reinventing in RE.
So I think you owe 25% on 59k
And 10% on 24
Is that right ODP?
you can deduct a property 1/27th each year, The article says it's automatic. Once you sell it, you have to pay 25% on the price you depreciated, and 10% on the capital gains for selling at a profit. You can avoid the capital gains by reinventing in RE.
So I think you owe 25% on 59k
And 10% on 24
Is that right ODP?
This post was edited on 2/13/17 at 1:33 pm
Posted on 2/13/17 at 2:32 pm to Rust Cohle
Depreciation is "allowed" or "allowable".
It is not what you actually deducted on a tax return, it is what would have been allowed regardless of whether you deducted it or not. Your failure to deduct allowable depreciation reduces your basis.
It is not what you actually deducted on a tax return, it is what would have been allowed regardless of whether you deducted it or not. Your failure to deduct allowable depreciation reduces your basis.
Posted on 2/13/17 at 2:37 pm to SnukaD
Any depreciation taken previously will need to be " recaptured". You will need to treat the amount of depreciation taken as ordinary income. You will also have a long term capital gain for around 24k (sales proceeds-original purchase).
You may want to consult a CPA for this part to make sure you got it right
You may want to consult a CPA for this part to make sure you got it right
Posted on 2/13/17 at 2:44 pm to JDCPA76
Excellent point, and why a CPA would not be a bad idea to consult. Make sure you actually took the deductions in the past an amend returns if necessary.
Posted on 2/13/17 at 3:02 pm to OceanMan
quote:
Any depreciation taken previously will need to be " recaptured". You will need to treat the amount of depreciation taken as ordinary income. You will also have a long term capital gain for around 24k (sales proceeds-original purchase).
Depreciation recapture on real property is limited to 25 percent. so it's not as bad.
Posted on 2/13/17 at 3:09 pm to LSUFanHouston
Thanks for clarifying.
Posted on 2/13/17 at 4:50 pm to Rust Cohle
It was my pimary residence for 9 years and a rental property for about 8 years. So I think only approx 27k is taxed at 25%. At least I hope so lol
Posted on 2/13/17 at 5:11 pm to SnukaD
I think you are on the right track
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News