Sale Of Rental Property

[caspar99]

s About Taxes)/sale of rental property Advertisement Expert: Helen P. O`Planick, EA - 10/10/2006

Thank you. So the amount of tax has to do with the amount of gain? What if the gain is more than $400,000. I've been using google to research this question but I'm not finding sites that answer the question very well. I did learn some of the basics. I have to look back to see what depreciation was already deducted and then tried to figure out all the numbers that create the cost basis. It's gonna be alot of work since the house was built in 1988 after we bought and developed the property in 1981.I did find that original price. I got divorced in 1992 and I don't have alot of the info so I'll have to research everything. I just wish I had a list of what costs go into the basis(does the clearing of the land, the septic, electric go in?) what goes into the cost of the house? actually I get that answer but I'll have some difficulty coming up with an accurate answer. If you know of  a site that is written in plain English, I would love to have it.

Thanks,

Toni Shiurba

Followup To

- I turned my home into a rental 5 years ago. If I sold it, I understand the basis minus depreciation is subtracted from the sale price. At what tax rate do I get taxed if I have a low income under $10,000?

[Azi]

- With a low income, your rate probably will not top 15%, but it depends on the amount of the gain.  This is just an estimate.

Helen, EA in PA

[dodya]

Toni, plain language?  hehe

Seriously there are numerous sites.  www.fairmark.com and www.misc-taxes-moderated are two good asking question sites.

What goes into this place?  Everything that has been done to it.  

If your gain is $400K, you can figure you will have income taxed in the 25% and higher brackets.  

For this kind of money, I would call around, find a local tax professional that will have a sit down with you and work with you on this.  The taxes you are going to pay are going to be nothing to sneeze at, so spend a little now to help you save more later.

Helen, EA in PA