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Rental Property Sold - Capital Gains, Depreciation Recapture, Income, etc
I am following up on a past question. I sold a rental property which I rented out initially, moved back in for around 3 years, and rented a few months before selling it. I am trying to better understand capital gains, depreciation recapture, income, etc. Here is some info I pulled from TurboTax and trying to understand my implications as:
I thought rental property capital gains are taxed as long term capital gains and not added to income on 1040 Line 8 Additional Income. What form will they show up on? I see numbers added to income in 1040 tax form- is that a result of depreciation recapture- if so, mine is only $35750 and not $53373? Looks like am not understanding something here.
- Form 4797- Sales of Business Property Part II Line 18b Redetermine Gain Loss: $58070
- Schedule 1: Additional Income and Adjustments to Income Part I Line 10 Additional Income - Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8: $53373
1040 Form: **Line 8 Additional income from Schedule 1, line 10: $53373
I see numbers added on as income in 1040 tax form
Details on draft initial numbers:
Form 4797- Sales of Business Property
- Part I Line 6 Gain: $3834
- Part I Line 7 Combine: $3834
- Part II Line 10 Date Acquire/Sold: 8/26/11 to 3/30/24
- Part II Line 10 Gross Sales Price: $62852
- Part II Line 10 Cost: $4782
- Part II Line 10 Gain: $58070
- Part II Line 17 Combine: $58070
- Part II Line 18b Redetermine Gain Loss: $58070
- Part III Line 20 Gross Sales Price: $68364
- Part III Line 21 Cost: $100280
- Part III Line 22 Depreciation: $35750
- Part III Line 23 Adjusted Basis: $64530.
- Part III Line 24 Total Gain: $3834.
- Part III Line 26a Additional Depreciation: 0
- Part III Line 26c Subtract: $3834
- Part III Line 30 Total Gain: $3834
- Part III Line 32 Form 4797, line 6: $3834
Schedule D Capital Gains and Losses:
- Part II Line 11 Gain from Form 4797, Part I: $3834
- Part II Line 15 Net long-term capital gain or (loss): (4449)
- Part III Line 21 Smaller for Form 1040, 1040-SR, or 1040-NR, line 7: ($3000)
1040 Form:
- Line 7 Capital Gain or Loss: ($3000)
- **Line 8 Additional income from Schedule 1, line 10: $53373
** Not sure why this is additional income here as thought this would be long term capital gains.
Schedule 1: Additional Income and Adjustments to Income
- Part I Line 4 Other gains or (losses). Attach Form 4797: $58070
- Part I Line 5 Rental real estate Schedule E: ($6290)
- Part I Line 9 Total Other Income: $1593
- Part I Line 10 Additional Income - Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8: $53373
Home status:
Rental: Aug 2011 to July 2020
Personal: Aug 2020 to July 2023
Rental: Aug 2023 to March 2024
THANK YOU!!