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rpetrossian
New Member

Sold my duplex in 2019 after 19 years, lived on one side the required amout of time in the past five years, other side was 100 percent rental

I have listed the sale income on both the personal income side (total sales price) and business side (half the sales price). I expected capital gains taxes on both sides, but the calculated final tax I owe seems excessive at about  25 percent without including any deductions such as the price I paid originally or credits such as the $250,000 tax free capital gains on selling your main home.  I was expecting the tax rate to be about 15 percent overall after I get the $250,000 deduction on my personal side. TurboTax calculated depreciation for the rental side at $106,000, and even after that is added, this tax amount TurboTax calculated and rate still seems too high. Where I am going wrong, in entering the information or can the tax really be that high? I "made" less than $150,000 in income from retirement income and early withdrawals from my 401K account.

3 Replies
AmeliesUncle
Level 12

Sold my duplex in 2019 after 19 years, lived on one side the required amout of time in the past five years, other side was 100 percent rental


@rpetrossian wrote:

I have listed the sale income on both the personal income side (total sales price)


For the personal side, you would only enter 1/2 if you only lived in  1/2.

 

 


@rpetrossian wrote:

 after I get the $250,000 deduction on my personal side


Did you live in the half for the entire 19 years?  If not, then you MIGHT be paying tax on PART of the personal gain.  If it was rented after 2008 and then you later made it your Principal Resident, only PART of the gain can be excluded.

 

 


@rpetrossian wrote:

TurboTax calculated depreciation for the rental side at $106,000, 


The gain based on that $106,000 is taxed at your regular tax return, up to 25%.

 

 

That income may also be subject to the 3.8% Net Investment Income Tax.

Also, that 'extra' income could cause some deductions or credits to be reduced or eliminated.

Anonymous
Not applicable

Sold my duplex in 2019 after 19 years, lived on one side the required amout of time in the past five years, other side was 100 percent rental

 
Anonymous
Not applicable

Sold my duplex in 2019 after 19 years, lived on one side the required amout of time in the past five years, other side was 100 percent rental

on the rental side there is depreciation recapture up to the amount of the gain taxed at a max of 25%.

 

 

you get capital gain treatment (the preferred rate) only on the gain on the sale of the land and the gain on the building  in excess of  the depreciation taken 

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