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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 10:37 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 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 6:55 pm to SnukaD
Why did you sell if you don't mind me asking?
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