I am new to capital gains, & my CPA is to busy for me!
Hello, my husband and I purchased 7 duplexes during about 8 years ago. We had unexpected offer for these duplexes and are now selling them on April 30th. We did not have them listed and had no plans to sell prior to this offer. However, we are now trying to figure out capital gains and a 1031 exchange. Our CPA is unable to meet with us because of her schedule, and it is not easy to connect with my 1031 exchange company, and I am not sure they tell us our capital gain side of it anyway. All of our duplexes were purchased for close to the same price. I would like to give an example of one property and ask if I am thinking about this right.
We purchased one of the properties for $155,345 and over the years have added in improvements that total $14333. Then over the years we have depreciated $44,843.
We are selling this property for $253,000.
So here is the question:
Is my cost basis $155,345 plus the improvements? And I am just taxed 25% on the depreciation amount of $44,843 plus the capital gains?
Or is my cost basis $155,345 minus the depreciation and has nothing to do with the improvements?
Or is my cost basis $155,345, nothing to do with the depreciation or improvements? And I am taxed the 25% on the depreciation amount and then whatever rate I will be taxed on the capital gains?
I am trying to determine if I want to do a partial 1031 exchange and which properties I should exchange.
Thank You in advance for any help in understanding this!!!