Are you a tax accountant? How I can't say thank you enough!!
"Let's say the purchase price was 200,000. Three years of depreciation is roughly 20,000. So your depreciated basis is 180,000. Then let's say you sell for $400,000. When you subtract your remodel costs, your sales expenses, and your depreciated basis, you would have a gain of $146,000. The first $20,000 is recaptured depreciation and will be taxed at 25%, regardless of how long you lived there. The remaining $126,000 is long term capital gain and is usually taxed at 15%, or would be tax-free if you sell after May 2016."
-) if applying to my case...
Purchased $249,900
Depreciation (10% ?) $24,990
*Deprecation basis $22,4910
Sold home $450,000 (supposed)
*Agent fee 6% $27,000
*Remodeling expense $50,000
* First $24,990 is recaptured so it's 25% regardless of residency -) $6,247.50
Then remaining gain is $141,842.50
Depends on 2 years minimum residency with 2 years minimum ownership,
$141,842.50 can be tax free or taxable 15% ($21,276)
Is my calculating correct? Doesn't have to be accurate , I just would like to see how much I need to be ready to pay tax or not..
Hope my calculation is right.
Before getting your professional help, I just thought if I don't quality , my gain tax would be over $50,000...now I see it can be $21000 less or more or not.
Tomorrow is thanksgiving.
God bless you and your family.
I'm so astonished and joyful to know how it goes!
