Hal_Al
Level 15

Investors & landlords

You may exclude the entire $30K capital gain recuse you lived in it for the required time.  The rental time is irrelevant, because it was less than 5 years and  occurred after it was your residence.  The fact that you bought another residence is also irrelevant (that was an old rule from 20 years ago). 

 

But, you must "recapture" (pay tax on) any depreciation you claimed (or should have claimed) while you rented it out.  Depreciation recapture is taxed as ordinary income (not capital gains rate), but not more than 25%.

 

In TurboTax (TT), enter as a home sale. TT will ask about depreciation.

 

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