I read an investor can lose 50% when selling a property they own

[Benjamin Cowles]

Brandon mentioned in his blog here:

http://www.biggerpockets.com/renewsblog/2013/11/05...

that if you own a property free and clear you could lose 50%+/- to taxes. He didn't say much more than that but that took me as something I should read up on. Anyone know what he's talking about or what/where I could research on taxes for investors to understand the details on this? 

[Steven Hamilton II]

Originally posted by @Benjamin Cowles:

Brandon mentioned in his blog here:

http://www.biggerpockets.com/renewsblog/2013/11/05...

that if you own a property free and clear you could lose 50%+/- to taxes. He didn't say much more than that but that took me as something I should read up on. Anyone know what he's talking about or what/where I could research on taxes for investors to understand the details on this? 

 I should clarify, that is someone is holding it short term, they could have ordinary rates up to 39.6% plus the medicare surtax 3.8% and state rates up to ~13% = 56.4%

Even held long term there could be depreciation recapture taxed up to 25% plus medicare surtax 3.8% and state rates into the teens(13%) = 41.8%  It can add up very quickly.