Capital gains question - selling rental property
Hello all, Quick question for you "experts" here. I have a rental property in GA that I'm looking to sell.
I've owned it since 2004, when i paid $200k for a brand new home. I have rented it out since 2016. My mortgage balance is $70k and I have an offer from current tenants to sell at $228k. My profit will be roughly $158k.
Do I pay capital gains on this rental if my net profit is less than what i purchased the home for ?
Thanks , Mark
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#1 Foreclosures Contributor
- Real Estate Professional
- West Palm Beach, FL
@Mark Glade Your profit is not the selling price less your mtg balance.
It is the selling price (less. closing costs and fees) minus your purchase price along with capital improvements you made (new roof, bathroom, etc).
You cap gain/profit will be less than the $28k difference. You will have to pay tax on the depreciation you took, or Should of taken, while it was a rental. If you didn’t take the depreciation, you can file a certain form to take that deduction now, since you have to declare it now....which might make that a wash....a CPA can guide you better.