Bought rental condo for $44,500 in 2007. Sold in 2017 for $47000. It shows a profit of $18,888, Don't understand why it shows such a profit?

[TaxGuyBill · Accepted solution]

That is because you have been claiming depreciation, which lowers your "Basis".

So over the past 10 years, you have received about $16,000+ in tax benefits for claiming depreciation.  That also lowers your "Basis", so it is sort-of as if your original purchase price was $28,000-ish.  That creates a taxable gain.