@susanpbutler wrote:
$60,000 capital gains after capital improvements, acquisition, closing costs, etc., and it looks like I then have to go back and get tax 25% for depreciation I took over the years on the house? That is a hefty amount. I live in Florida.
Yes. Depreciation is essentially a deduction for "lost" value due to wear and tear. It devalues the property on paper. If you are able to sell for more than the adjusted value, that means you are getting the depreciation back. If you deducted it before, you have to pay it back. Recapture is not necessarily taxed at 25%, it is taxed as ordinary income with a cap of 25%. So if your only income this sale, you get a standard deduction depending on your filing status (single, married, head of household, etc.) and then your ordinary income is taxed at 10% or 12%. You can create a backup account in Turbotax 2025 version, and enter your data to get an estimate of the tax (which assumed the tax law won't change this year, which seems like a safe assumption at this point. Or try this estimator.
TaxCaster tax calculator
