Depreciation Recapture

[moolelechip]

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.

[tagteam]

Yes, the $107,000 is subject to Section 1250 recapture which is taxed at ordinary income tax rates up to a maximum of 25%.

[moolelechip]

Bummer. Thank you.

[AmeliesUncle]

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@moolelechip wrote:

net proceeds  221955

cost basis         72548

lt gain              149407

accum dep.     107000

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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?