Originally Posted by Timbo
#1;I purchased a rental home ($150k) 10 years ago, since then the value hasn't went up in the area (140k). I've depreciated the repairs and improvements every year and have taken a loss (taxes,ins,improvements - minus income). will i have capitol gains?
#2; if so how are they figured? are these numbers on my tax returns? Any guidance would be appreciated.
#1;No; and you do not have to recapture the sec 1250 depreciation taken previously. In general, when you sell your rental property, your profits are subject to capital gains tax since you don't get the same exclusions that you do on your personal residence. However, as you took a loss on the sale of the pty , you do not have any taxable capital gain from the sale.
#2; Correct; basically, to find your gain or loss, you neeed to subtract your adjusted basis from your selling price. If the number is positive, you have a gain that will be taxable. since it's negative, selling price< adjusted basis of the rental pty, you have a loss that you can use to offset other taxable gains. On 1040; your loss is reported on 1040 line You do no t have to file Sch D of 1040 as you took a loss and do not need to recapture sec 1250 depreciation expense