In June 2005 I purchased a condo for $378,200. I lived in the condo for a couple years (primary residence) before moving abroad and turning it into a rental property. In April 2020 I sold this rental property for $300,000. I think I entered all of the information correctly, but now my taxes say I owe $30,000 federal and $7500 state taxes. I LOST money on the sale of this rental property (note, passive losses were carried over from previous years - so, I think that’s already captured as it says, “The depreciation allowable for this property after May 6, 1997 is $173,221 ($150,708 for AMT)” - no clue what this means) -
How do I owe taxes on the sale of this rental property when the money did not go in my pocket (net) and the gross amount of $300,000 sales price is on the sales W-9 form. What am I doing wrong that I’m paying taxes on a rental property sale that depreciated in value for the last 15 years where I lost money each year (captured in all historical tax returns using Turbo Tax as 'passive' loss) and now owe tens of thousands of dollars on money I never made and only lost??
I am baffled how this can be and looking for any mistake because this does not seem correct - what am I doing wrong? Thank you.
