Tax consequence on selling half duplex

[Sattir Bitti]

Hi,

We have a full Duplex (investment property), and wondering what are the tax consequences if only 1 of the 2 unit is sold? How are depreciation recaptures,  capital gains etc are calculated ? What happens to outstanding loan? Is lender approval needed for the sale? 

Thanks. 

Sattir B

[Scott Mac]

You might change the supply and demand for your investment.

If you do this, you will have 2 SFH's that if investors want to buy and rent will have to pay 20% down for each vs a low down FHA for a duplex house hack.

Your buyers pool might be smaller due to this.

Also you will be competing in sales with SFH's which in some areas greatly outnumber duplexes but will have created 2 condos (which in some areas have lower desirability than SFH's or duplexes).

Just my 2 cents.