Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 02-25-2015, 05:34 PM
Junior Member
 
Join Date: Feb 2015
Posts: 1
Sale of Primary Residence with Rental

Hello,
For the last 20 years we rented the first floor of our two story primary residence as a seperate rental apartnment. The accountsnt used half of the utilities, taxes, insurance, and other expenses as deductions against the rental income. He also took some depreciation every year. In March of 2013 my wife and I divorced, she stayed in the house I moved out, we maintained the first floor as a rental. I retained 50% ownership in the property.
In May of 2014 we sold the property. The appraised value when we started renting was $186,000, half was used as the value of the rental. We sold for $330,000.
How should the gains be treated and how much of the depreciation if any needs to be recaptured?
Thank you
John



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 02-27-2015, 02:15 AM
Moderator
 
Join Date: Oct 2010
Posts: 5,236
Quote:
Originally Posted by jholst View Post
Hello,
For the last 20 years we rented the first floor of our two story primary residence as a seperate rental apartnment. The accountsnt used half of the utilities, taxes, insurance, and other expenses as deductions against the rental income. He also took some depreciation every year. In March of 2013 my wife and I divorced, she stayed in the house I moved out, we maintained the first floor as a rental. I retained 50% ownership in the property.
In May of 2014 we sold the property. The appraised value when we started renting was $186,000, half was used as the value of the rental. We sold for $330,000.
How should the gains be treated and how much of the depreciation if any needs to be recaptured?
Thank you
John
then there is no long term capital gain tax forobthof you;if you and spouse owned it jointly but file MFS or separated return, then, each of you can exclude $250k of gasin from the sale of th ehome aslongas you sell it Aftwer may 6 1997.in your case the gain is too low so no tax liaiblity on the realized long term capital gain. however, yu need to recapture the unrecaptured sec 1250 depreciaiton as your ordianry incoem taxed at 25% aslongas yur marginal tax rate is 25% or higher; however, if your tax bracket is 15% the its rate'd be 15% , 10% then it'd be also 10%.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
sold rental/ primary residence [email protected] Capital Gains 1 04-08-2014 07:36 PM
Partial Rental of Primary Residence Mike A For 2013 5 03-27-2014 12:42 PM
Primary residence rental HelpPlease Rental Real-Estate 1 02-07-2013 03:21 AM
Primary Residence then Rental tadelstein Homeowner Tax 8 07-25-2011 07:37 AM
deductions for rental, now primary residence askc Rental Real-Estate 1 02-15-2009 11:59 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning