Opus 17,
Thank you for your example, it is close to my numbers. But I am a little concerned now that I will be paying almost what I made in taxes.
From your example but with my numbers, I bought for 150,000 I rented it for the last 7 years, and I just looked at a few previous year’s schedule E forms and I have been depreciating ~4400 each year for 7 years I rented it = ~40,000. I sold it for 165,000.
If I understand right I have capital gains of 55,000 and the first 40,000 is taxed at 25% = 10,000 and another 15% on the remaining 15,000 = 2,250 for a total of 12,250 that I should set aside for 2017 taxes. (and pay sooner than Jan 15). My heartburn is I sold for 165k and owed 135k and paid about 15k in closing cost and realtor fees leaving me with 15k profit. So, if I need to pay 12k in taxes I will only profit -3k for a 11-year investment… is this right?
