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Old 02-06-2010, 08:06 PM
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Unhappy Sale of rental property -- results in TTax don't seem right

Situation:
Sold a condo on 11/16/09 that had been used as a rental property starting in late '07. We bought the place on 5/3/2004.
We bought the condo for $227,500 in 2004.
We sold this year for $180,000.
I've done what I think is right in Turbotax and it's indicating we have a GAIN of $38,006.
I also believe it's telling me total depreciation is $13,198.
I'm confused, as I'm sure we have should have a loss here.

Any ideas what's happening?



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Old 02-07-2010, 04:22 PM
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A gain or loss on the sale of the Condo (Rental Property) is calculated as follows;

Selling price of the Condo
Less: <Selling Commission>
Less <Cost Basis>
__________________________
=Gain or Loss on sales of Condo

What is Cost Basis?
Cost Basis = Original Cost Price + Depreciation claimed in prior year + Improvements made to date

You should most likely not have such a high gain, the gain most likely would be to the extend of the depreciation claimed to date, provided you sold the condo for the original purchase price. Indeed, it seems you sold it a loss so, the gain cannot be so high.

I would have a CPA review your transactions, there is definitely an error in your input somewhere! I agree with you, most likely you should have a loss on the sale of the condo!

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