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Selling rental home: capital gains
Posted on 4/13/26 at 11:54 am
Posted on 4/13/26 at 11:54 am
Q for the rental folks here. We’re selling our Boston rental and after agent fees etc looking at 120k profit. Looking to see if there are any additional things I can do to reduce the taxable amount.
I know if we lived 2/5 years it’s fully deductible but is that also pro rated (so if 6 months, it’s quarter deductible?)
I know if we lived 2/5 years it’s fully deductible but is that also pro rated (so if 6 months, it’s quarter deductible?)
9
Posted on 4/13/26 at 12:01 pm to fareplay
is there a state capital gains tax there like here in Louisiana? Where do you live exactly? What state are you being taxed in? Ours is 3% and it sucks. You will pay that plus federal if so.
Also never forget depreciation recapture.
If you do not know how to calculate it here it is.
I sold 4 this year. lots of number crunching for taxes.
depreciation recapture
good luck foreplay!
Also never forget depreciation recapture.
If you do not know how to calculate it here it is.
I sold 4 this year. lots of number crunching for taxes.
depreciation recapture
good luck foreplay!
This post was edited on 4/13/26 at 12:02 pm
Posted on 4/13/26 at 12:04 pm to fareplay
Primary home exclusion is prorated only if you meet some qualifications like unforeseen circumstances, health issues or job change. Talk to tax professional to see if you qualify.
Maybe wait til Thursday to ask.
Maybe wait til Thursday to ask.
Posted on 4/13/26 at 12:13 pm to fareplay
Why sell? That 120k “profit” will wind up being 50k after taxes and fees
Posted on 4/13/26 at 1:33 pm to el Gaucho
quote:Either you don't understand how taxes are assessed on long-term capital gains or you suck at math.
That 120k “profit” will wind up being 50k after taxes and fees
Posted on 4/13/26 at 1:34 pm to el Gaucho
We live in Seattle and managing it across the country combined with unknown repairs and taxes got annoying. Just want the liquidity.
It was for my job change so hopefully that works
It was for my job change so hopefully that works
Posted on 4/13/26 at 2:48 pm to fareplay
You could always sell via seller finance and avoid the massive tax bill.
Posted on 4/13/26 at 2:54 pm to fareplay
Have you looked at a 1031 exchange?
Posted on 4/13/26 at 4:18 pm to fareplay
quote:
Just want the liquidity.
I was going to also recommend a 1031 exchange until I saw the liquidity comment. You would walk with just over $100K in cash after the the capital gains are paid.
With the 1031, you would have to spend the total proceeds on another property to avoid about $18K in taxes*.
* assuming you are not a OT baller making over half a million, then the taxes will be much more.
Posted on 4/13/26 at 8:05 pm to fareplay
Just sell and don’t claim anything if you’ve owned the home for a few years. They’re less likely to catch it if you’re not selling multiple properties in consecutive years.
Did this with a rental in 2022 and never heard a peep. Worst case scenario they catch it and send you a bill for what you would’ve paid anyways. Worth the risk.
Did this with a rental in 2022 and never heard a peep. Worst case scenario they catch it and send you a bill for what you would’ve paid anyways. Worth the risk.
This post was edited on 4/13/26 at 8:23 pm
Posted on 4/13/26 at 8:19 pm to BabyTac
quote:
Just sell and don’t claim anything if you’ve owned the home for a few years. They’re less likely to catch it if you’re not selling multiple properties in consecutive years. Did this with a rental in 2022 and never heard a peep.
Here we go…
Posted on 4/13/26 at 8:30 pm to dat yat
We make a lot so it’s extra crappy. I’ll look up 1031 this year is first year our side gig is paying off so we have a bit more complexity
Posted on 4/13/26 at 8:56 pm to BabyTac
quote:
send you a bill for what you would’ve paid anyways
Oh yeah underreporting and underpayment penalties and interest aren’t a thing……
Posted on 4/13/26 at 9:52 pm to fareplay
quote:
I’ll look up 1031 this year is first year our side gig is paying off so we have a bit more complexity
It just defers (kicks can down the road) on taxes. The goal is to make it to death but only 2-3% of people do. Some people think it eliminates taxes, it simply defers them.
Posted on 4/14/26 at 2:16 am to BabyTac
quote:
Just sell and don’t claim anything if you’ve owned the home for a few years. They’re less likely to catch it if you’re not selling multiple properties in consecutive years.
Did this with a rental in 2022 and never heard a peep. Worst case scenario they catch it and send you a bill for what you would’ve paid anyways. Worth the risk.
Never heard a peep, yet. The 1099-S may throw a monkey wrench into that plan.
quote:
Looking to see if there are any additional things I can do to reduce the taxable amount.
If not doing the 1031, try to think of anything and everything you've done to that house that you haven't already expensed that you can use to add to your basis.
This post was edited on 4/14/26 at 2:19 am
Posted on 4/14/26 at 8:24 am to fareplay
Do you use a tax accountant? Depreciation recapture, 1031, understanding what expenses can be deducted are all areas a tax person can advise you on.
Posted on 4/14/26 at 1:39 pm to LSURussian
quote:
Either you don't understand how taxes are assessed on long-term capital gains or you suck at math.
quote:
fareplay
Checks out
Posted on 4/14/26 at 1:49 pm to fareplay
quote:
Q for the rental folks here. We’re selling our Boston rental and after agent fees etc looking at 120k profit. Looking to see if there are any additional things I can do to reduce the taxable amount.
These are the questions you get answered by a professional BEFORE you sell
Posted on 4/14/26 at 4:59 pm to fareplay
Did you ever claim as a primary residence ...can you 1031?
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