Capital Gains and Losses
Questions and comments about tax rules for buying and selling stocks, mutual funds, real estate and other assets.
Will we owe any tax on sale?
Posted by: agnis, May 25, 2017 11:18PM
2005 purchased a home for $270,000, and maintained as our principal residence.

2011-2017 rented the home out. Basis at time of rental was much lower than purchase price due to financial crisis - $170,000.
Depreciation taken each year of $5,000

2017 sold home for $240,000 (after paying realtor fees etc).

Since we did not live in the home for 2 years prior to the sale, will we owe capital gains tax on the difference between sales price and cost basis?

Re: Will we owe any tax on sale?
Posted by: triad, May 27, 2017 01:39AM
According to you, you claimed $35K of depreciation. So your adjusted basis is $270K- $35K or $235K. You sold for $240K, so you have $5K of 1250 gain (taxable at ordinary rates, up to a max of 25%).

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