PLEASE HELP AS REALLY CONFUSED!!
I am trying to figure out how taxes work for this type of property inc capital gains, depreciation, depreciation recapture, loss carryovers, principal residence exclusion, etc. Any specifics will be greatly appreciated including any help on the math/numbers:
- Rental property Aug 2011-Aug 2020 for $300,000.
- Moved in and made personal residence from Sept 2020-July 2023
- Rental property again Aug 2023-March 2024
- Sold March 2024 for $425,000
- Gain of $100,000 minus closing costs/expenses
- Depreciation of approx $30,000 over the years as a rental
- Passive losses- Where do I find this? I read it is on Form 8582 last year, Page 2 Worksheet 5. I don't believe I have this form in last years returns. Does turbo tax automatically bring this over from past years? How does it know its for this property or is a cumulative passive loss regardless of the investment property as sold one a few years ago?
Questions:
1. Do I pay capital gains on the $100,000 or do I get "Principal Residence Exclusion: You lived in the home as your primary residence from 2020 to 2023 (three years)?"
---I thought I read somewhere that you can't bypass the capital gains by living back in the property and it gets prorated on months its a rental vs when it a personal property??
2. I believe I have to pay the Depreciation recapture on the $30,000? What's the tax rate on it- 25% and does it get added to income (the $30K or the 25% of the $30K)
- Depreciation Recapture: Depreciation claimed during rental periods is subject to recapture tax at up to 25%.
3. Do I pay the:
- Net Investment Income Tax (NIIT): A 3.8% NIIT may apply to the gain depending on your income.
How does TurboTax online fill out the info and what areas do I denote the rental and primary switches and associated dates. I don't believe I saw this clarification?
Any help is greatly appreciated
