My husband purchased a condo is 2008 for $98,000 right before the housing market crash. Property values dropped overnight to $30,000-$40,000. We lived in the unit till 2013, and when we bought a house, we opted to rent out our unit to pay down what we still owed on our mortgage. The housing market has come up and we could sell for about $75,000, and we have paid down some, but we still owe $75,000. We don't live close to our rental property and we aren't making any profit, just breaking even, so we are ready to be done with the place. We know we can sell for what we owe, but we likely won't get much more than that. We are worried about capital gains tax, because we can't afford to take a huge loss at tax time.
If we sell for less than we paid initially, do we owe capital gains?
Most brackets say that if you make more than $76,000 in income tax, you pay 15%. We make more than $76,000, but we will not be making any money on the rental property, will we still have to pay a capital gains tax?
Can we deduct what we still owe for our mortgage from our capital gains?
My husband thinks that we will have to pay about $10,000 in capital gains tax, but if that is the case, we will be stuck with this property for another decade or more. Please advise us as to how we can sell the property this year, and break even.
Other than capital gains tax, what other fees or taxes are typically associated with selling a rental property?
