Need Help on Tax Issue with Townhome Sale

3 Replies

Purchased 2005 at 190K and only worth $210K now. Selling. Overall made little money on place with expenses. Renting now. Little worried about Phoenix market and tired of the hassle of dealing with the rent.

Total Equity is $71K based on $210 value.

$20 K of the 71K would be capital gains (correct)?   ($210 - $190)

We just put in about $8 K in repairs.  Deduct off of capital gains ?


And there will be tax on the $20K in the form of capital gains correct ?

Both State and Federal ?

@Bruce Harding

Add capital improvments it basis which reduces capital gain. Unrecaptured section 1250 gain for depreciation taxed at 25%. Selling expenses will reduce any gain. Have your cpa crunch the numbers.

Originally posted by @Bruce Harding :

Purchased 2005 at 190K and only worth $210K now. Selling. Overall made little money on place with expenses. Renting now. Little worried about Phoenix market and tired of the hassle of dealing with the rent.

Total Equity is $71K based on $210 value.

$20 K of the 71K would be capital gains (correct)?   ($210 - $190)

We just put in about $8 K in repairs.  Deduct off of capital gains ?


And there will be tax on the $20K in the form of capital gains correct ?

Both State and Federal ?

71k is not your gain. Yes that’s your equity, but it doesn’t drive your gain.

No, you cannot deduct 8k against your capital gain of 20k.