If I am understanding you correctly, say it costs $100,000 to purchase the home. Over 10 years you depreciate a total of $50,000. You sell the house at $150,000 (CMV). If I had net equity of $100,000, $50,000 would be taxed at 20% for capital gains and then the $50,000 I depreciated would be taxed at 25% giving me a net $55,000 in my pocket? In other words, my total capital gains tax would be $45,000.
I am assuming Turbo Tax would calculate this all out once the property is sold and reported on taxes? Thank you.
