Good morning!
We sold our rental (a condominium) this month. We purchased the condo in 2019 for $525k in Petaluma, CA. We sold it on October 7th for $609K. We also spent approximately $23k on upgrades to the unit (new carpet, painting the entire interior, new light fixtures and bathroom remodel) prior to listing the property. My question is: our combined salaries are approximately $425k between my spouse and I so we would be in the 15% captial gain calculation I believe. How do we deduct our expenses for improvements in order to reduce our captial gains tax. We did have $21k held out at closing for California Capital Gains and are curious if our expenses will reduce that amount due along with Federal capital gains. Thank you!
