Thank you! I was able to follow till the last few steps. Could you bear with me with hypothetical numbers to make sure I understand.
cost basis = 300,000
depreciation = 15,000
adjusted cost basis = 285,000
Scenario 1:
sale price = 575,000
gain = 290,000
sales expense = 10,000
taxable gain = 280,000
deprecation of 15,000 is taxed regardless
---If qualify for exclusion, should I take 280,000 - 15,000 = 265,000? Out of which 250,000 is exempted from taxes. There is still 15,000 left.
suspended loss carry forward = 20,000. Do I then deduct 15,000 of it to wipe out the gain and there is still 5,000 suspended loss to carry forward for future years? In this case, I benefit from both 2 of 5 exclusion and release of suspended loss?
---If not qualify for exclusion, should I still take 280,000 - 15,000 = 265,000? out of which 0 is exempted.
suspended loss carry forward = 20,000. Can I then deduct all of it and the remaining 265,000 - 20,000 = 245,000 is subject to capital gain tax?
Scenario 2:
sale price = 535,000
gain = 250,000
sales expense = 10,000
taxable gain = 240,000
deprecation of 15,000 is taxed regardless
---If qualify for exclusion, should I take 240,000 - 15,000 = 225,000? All of it is exempted from taxes
suspended loss carry forward = 20,000. It is not used, do I carry it forward for future years?
---If not qualify for exclusion, should I still take 240,000 - 15,000 = 225,000? out of which 0 is exempted.
suspended loss carry forward = 20,000. Can I then deduct all of it and the remaining 245,000 - 20,000 = 225,000 is subject to capital gain tax?
Not sure if I'm making sense.
Thank you.
