Residential rental property

[wellsgrey]

What are the tax consequences when selling a residential rental property?

[mirthaguer]

The gain or loss in connection with the sale of the residential property has to be reported in the year of sale. (See comment below re Sale).  The "closing statement", also called  HUD (sometimes) will show the sales price and will also list all the expenses of sale including commission, stamps, etc.    The expenses of sale will be included in the cost of sale.  You will then get to deduct the original cost of the asset including land less the depreciation  taken.  Beware you are required to depreciate rental property and if you did not the IRS will still lower the cost of the property you sold by the depreciation you should have taken. (it is the allowed or allowable rule). If you had any suspended losses you will be able to deduct such losses against the gain realized.    If the buyer can not pay the purchase price you should be able to elect installment sale treatment allowing you to pay the taxes on the gain over time.