We sold our only residential rental incurring a LT gain. Since this is not a business, are we subject to the recapture tax? Hers the details:
net proceeds 221955
cost basis 72548
lt gain 149407
accum dep. 107000
I am trying to pay an estimate today. Dont want to send an extra 25k if I dont have to!
Thanks.
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Yes, the $107,000 is subject to Section 1250 recapture which is taxed at ordinary income tax rates up to a maximum of 25%.
Bummer. Thank you.
@moolelechip wrote:
net proceeds 221955
cost basis 72548
lt gain 149407
accum dep. 107000
If the Cost was only $72,548, how did you have $107,000 of depreciation?
Or did you mean the Cost was $177,548, and after the $107,000 of depreciation your Adjusted Basis was $72,548?
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