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2
Posted on 2/13/17 at 6:55 pm to SnukaD
Why did you sell if you don't mind me asking?
Posted on 2/13/17 at 7:21 pm to SnukaD
Still have to pay taxes on the gain, unless you've occupied as primary residence for 2 out of the last 5 years. I decided this year to use a pro from now on because we are planning to sell the one rental house we have now, but want to do more in the future. We didnt take enough depreciation over the past 3 years....did it myself through turbotax. Fortunately, we're not far off, but we are probably going to have to go through the hassle of amending
Posted on 2/13/17 at 9:22 pm to mikie421
quote:
you really should see a CPA. Spend a few hundred and probably save thousands.
This.
Posted on 2/13/17 at 10:13 pm to TrebleHook
I was just tired of being a landlord. I've had some pretty awful tenants. One guy actually wanted to wrestle me because his water wasn't hot enough. I had to throw him out.
I should've sold after Katrina when it was worth 50K more. Hindsight and all.
I should've sold after Katrina when it was worth 50K more. Hindsight and all.
Posted on 2/13/17 at 10:15 pm to mikie421
I think I will. I should've waited to buy Turbotax.
Posted on 2/14/17 at 11:09 am to SnukaD
What is your basis if you owned half of a property then bought the other person out of their half? Say the house is worth 200k, you paid 100k for the partners half. Then turn it into a rental. What is your basis for depreciation purposes?
Posted on 2/14/17 at 2:58 pm to Gutterman81
Typically what you paid for it if it's an arms length transaction
What you paid for your half plus what you paid for his. It's a lot less complicated if it hasn't been a rental before
What you paid for your half plus what you paid for his. It's a lot less complicated if it hasn't been a rental before
Posted on 2/15/17 at 6:01 am to OceanMan
What if your original half was inherited? Never been a rental before. Bought out the other half then turned into a rental.
Is my basis for depreciation 200k or 100k? Also when it was inherited the asset was valued at 200k, so is this even a taxable asset since it's inherited property and not worth anymore than it was when inherited?
Is my basis for depreciation 200k or 100k? Also when it was inherited the asset was valued at 200k, so is this even a taxable asset since it's inherited property and not worth anymore than it was when inherited?
This post was edited on 2/15/17 at 6:04 am
Posted on 2/15/17 at 8:21 am to Gutterman81
If inherited, you typically get the basis "stepped up" to the market value at time of death. So if the value hasn't changed since death, and that is what you buy your partner out for, then your entire basis is $200k. Your half you inherited at mkt value of 100 plus other half purchased for mkt value of 100. But the key is market value, and being able to substantiate it (i.e. Appraisal).
This is just a really high level piece of advice, I'd seek a CPA for sure. But the above is most likely your scenario, or at least enough to get you started.
Edit: FYI, the inherited portions is stepped up because the asset was supposedly subject to estate taxes already.
This is just a really high level piece of advice, I'd seek a CPA for sure. But the above is most likely your scenario, or at least enough to get you started.
Edit: FYI, the inherited portions is stepped up because the asset was supposedly subject to estate taxes already.
This post was edited on 2/15/17 at 8:23 am
Posted on 2/15/17 at 9:39 am to OceanMan
Should I receive a 1099-S from the IRS for the sale of the property?
And would that tell me exactly what my total depreciation is?
I believe I found iy in turbotax, under forms, but I want to make sure.
I did talk to a CPA and I'm definitely on the right track.
Thank you for your help also, OceanMan
And would that tell me exactly what my total depreciation is?
I believe I found iy in turbotax, under forms, but I want to make sure.
I did talk to a CPA and I'm definitely on the right track.
Thank you for your help also, OceanMan
Posted on 2/15/17 at 10:17 am to SnukaD
I did have an appraisal done when I bought it. So I will use that value as the basis. If/when I ever sell this property (as long as it's below 200k) I should only be tax liable for the depreciated amount (25% taxed) and not any equity correct? (since it was inherited)
Posted on 2/15/17 at 1:14 pm to Gutterman81
That sounds correct, if there was no "cash" gain, you would only be subject to depreciation recapture upon sale.
However, please familiarize yourself with 1031 exchanges, as they can defer the gain on sold property, as long as sale proceeds by more property. It's complicated, so impossible to explain here as there are so many variables, but it is good to be aware of as a income property owner
However, please familiarize yourself with 1031 exchanges, as they can defer the gain on sold property, as long as sale proceeds by more property. It's complicated, so impossible to explain here as there are so many variables, but it is good to be aware of as a income property owner
Posted on 2/15/17 at 1:25 pm to SnukaD
I don't believe you will receive the 1099-S from the IRS, I think the closing agent is responsible for preparing, I would check with them first. The form just reports the sale to the irs so they are aware. Turbotax could probably generate the same report though.
What I would do is try and pull your old returns (hopefully you kept them) and see what was charged to depreciation. I would then recalculate depreciation (purchase price/27.5 x number of years as a rental property) and compare the two. I assume you didn't capitalize any repairs (you just charged them off as they occurred, unless you improved structure like roof or added something like a dishwasher, you should be fine), which would be added to your depreciation base.
It's not as complicated as it sounds, so long as you kept good records. In the end, you want to report the recalculated amount for the sale. If you missed any depreciation, you may consider amending your return to reflect it, if it is material.
What I would do is try and pull your old returns (hopefully you kept them) and see what was charged to depreciation. I would then recalculate depreciation (purchase price/27.5 x number of years as a rental property) and compare the two. I assume you didn't capitalize any repairs (you just charged them off as they occurred, unless you improved structure like roof or added something like a dishwasher, you should be fine), which would be added to your depreciation base.
It's not as complicated as it sounds, so long as you kept good records. In the end, you want to report the recalculated amount for the sale. If you missed any depreciation, you may consider amending your return to reflect it, if it is material.
Posted on 2/15/17 at 2:05 pm to OceanMan
Unfortunately I did not keep all of my records, but thankfully, Turbotax tells me in a form what my prior depreciation was, which is around 24k and the current depreciation, which is around 3.2k. I'm adding those up and using that number. It appears right since I've had it as a rental for over 8 years. I'm not sure what other way I can find out exactly what it should be.
Thanks OceanMan!
Thanks OceanMan!
Posted on 2/15/17 at 2:08 pm to SnukaD
I think it should be close enough to not be an issue. No prob at all good luck!
Posted on 2/15/17 at 2:18 pm to OceanMan
Thanks, I'll check out the 1031. Looks complicated. Involving 3rd parties.
Posted on 2/15/17 at 4:46 pm to Gutterman81
It doesn't have to, but it's a way to facilitate it. When the time comes to sell, you will at least be glad to know about it.
Posted on 2/15/17 at 5:37 pm to Gutterman81
That's why I was asking why you sold. You could have done a 1031 exchange. Since you sold and received cash it may be too late.
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