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Deductions & credits
If you have ever used the house as rental property, you will almost certainly have a depreciation recapture event with which to deal.
If the house has always been used as a second home (never "business property"), then the calculation is simple:
Selling Price LESS selling expenses LESS adjusted basis EQUALS gain (or loss). In your case, this would be long-term capital gain (taxed at more favorable rates than ordinary income).
See https://www.irs.gov/publications/p523#en_US_2020_publink100010751
You need to ensure that you factor in your basis adjustments, such as improvements made over the years, closing costs, and any casualty losses.
‎September 5, 2021
8:31 AM