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We Own A Rental Home That We Have Rented For 15 Years. What Kind Of Gain Would I Have If I Sold It?

Real Estate
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Tax Professional Answers

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Jim Marshall, EA
The gain would be long-term capital gain. An example, if the cost of the property was $500,000, disregard the cost of land for this example, after 15 years the remaining basis would be $228,000, if the property were sold for $600,000 there would be a long-term capital gain of $372,000 at your capital gain rate.
Leave a Comment 58 weeks ago

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John Stancil
Overcthe course of 15 years a significant amount of depreciation has been allowed. This depreciation reduces the cost basis in the unit. So your basis is your original cost plus capital improvements (those you did not take an expense deduction for) minus depreciation allowed or allowable. The excess of the selling price over adjusted basis is taxable gain. That portion of gain represented by depreciation is taxed at ordinary income rates. Any remaining gain is taxed at long term capital gain rates.
Leave a Comment 58 weeks ago

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John Stancil
Overcthe course of 15 years a significant amount of depreciation has been allowed. This depreciation reduces the cost basis in the unit. So your basis is your original cost plus capital improvements (those you did not take an expense deduction for) minus depreciation allowed or allowable. The excess of the selling price over adjusted basis is taxable gain. That portion of gain represented by depreciation is taxed at ordinary income rates. Any remaining gain is taxed at long term capital gain rates.
Leave a Comment 58 weeks ago

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John Stancil
Overcthe course of 15 years a significant amount of depreciation has been allowed. This depreciation reduces the cost basis in the unit. So your basis is your original cost plus capital improvements (those you did not take an expense deduction for) minus depreciation allowed or allowable. The excess of the selling price over adjusted basis is taxable gain. That portion of gain represented by depreciation is taxed at ordinary income rates. Any remaining gain is taxed at long term capital gain rates.
Leave a Comment 58 weeks ago

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