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how do i figure my capitol gain ?

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? if so how are they figured? are these numbers on my tax return?
By timfranklin61585 from CA Oct 21st 2015
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I would talk with an accountant on this one.

Oct 21st 2015

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Your CPA will be your best point of information, if you don't have one; get one.

Oct 21st 2015

An accountant is your best source since much more info would be needed to properly answer your question, but since I've been a real estate investor for the past 30 years, I can give you some insight. Capital gains is the difference from what you purchased the asset for minus what you've sold it for.. (understand there are no capital gains until the property is sold) if that number is negative (as it is with your example), then there are no gains.. if the number is positive, then long term capital gains are taxed at a tiered flat rate ranging from 0% to 23.8% and it's based on the tax bracket you fall into when you do your taxes. But for your example, it does not mean you wont owe any taxes.. You also have to account for recaptured depreciation. If you purchased the home as an investment property and you have had it for a full 10 years, then you have depreciated your home down to an adjusted tax basis of approximately $95,000 after the 10 years.. so when you sell the home, and lets assume you sell it for $140,000 and net 130,000 after selling costs, then effectively, you have made $35,000 and this would get added to your income once you file your taxes for that year the property is sold.. Understand, this is a VERY SIMPLIFIED example.. there's so much more that goes into determining your tax basis, that it would be impossible without knowing much more info, which is why you really need to consult a tax adviser. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Oct 21st 2015
by 666


Jul 15th 2023


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