Reply To: Taxable gain on sale of formerly rented house?

Home Fairmark Forum Taxation of Investments Taxable gain on sale of formerly rented house? Reply To: Taxable gain on sale of formerly rented house?

#3566
kaneohe
Participant

https://www.kitces.com/blog/limits-to-converting-rental-property-into-a-primary-residence-to-plan-for-irc-section-121-capital-gains-exclusion/

might be interesting to read……..first order guess is that the basis
is the initial basis less depreciation. Looks like the max gain exclusion of 250K gets prorated based on yrs lived there
vs total yrs owned and the depreciation recapture remains.

If basis is 125K less depreciation; then gain is 275K + depreciation.
If exclusion is 250K – proration adjust, then taxable gain is 25K +proration adjust + depreciation . Also have to consider the usual capital improvements and transaction fees.

Hopefully somebody who really knows this stuff will be along later but try reading the link for a start.