Looking to sell rental property that will be fully furnished.
The furniture, linens, TV, Alarm System etc was bought for 15 - 20K
Capital Gain Taxes - How does this work when I sell the home? Is there something I need to do prior to selling the home or complete forms or ?? I am hoping I can deduct this to reduct my capital gain.
Thank you
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If you have been depreciating or writing off expenses for the furnishings, then you may not have any basis left in them, depending on when they were placed in service. Any basis you have left will reduce your gain, when selling.
When you sell a house, stocks, etc and have a gain that increases your tax liability, you should make an estimated payment to reduce your tax liability to $1,000 or less.
Some expenses of selling the home will also decrease your gain. See IRS pub 544 for full information and to help you plan.
The only thing you would need to do ahead of time to defer the gain, would be planning to buy another rental property and you would need to have a 1031 broker and all rules handled ahead of the sale.
Resources:
Instructions for Schedule E (Form 1040)
Like-Kind Exchanges - Real Estate Tax Tips
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