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TomYoung's is correct, with the additional factor that any permanent improvements you may have made will increase your cost basis and reduce your gain. A permanent improvement is something that adds value or extends the useful life of the property, such as a new roof or furnace. Repairs don't count and you already deducted them as an expense anyway. And you can reduce your sales price by selling costs like legal fees, commission, and transfer taxes.
So your cost basis is [cost plus improvements minus depreciation].
Your gain is [sales price minus cost basis].
The first $21.2K of the gain is taxed at 25% and any amount over that is taxed as a long term gain.
Your mortgage is irrelevant because it's money that had no tax consequences when you borrowed it so it has no tax consequences when you pay it back.
TomYoung's is correct, with the additional factor that any permanent improvements you may have made will increase your cost basis and reduce your gain. A permanent improvement is something that adds value or extends the useful life of the property, such as a new roof or furnace. Repairs don't count and you already deducted them as an expense anyway. And you can reduce your sales price by selling costs like legal fees, commission, and transfer taxes.
So your cost basis is [cost plus improvements minus depreciation].
Your gain is [sales price minus cost basis].
The first $21.2K of the gain is taxed at 25% and any amount over that is taxed as a long term gain.
Your mortgage is irrelevant because it's money that had no tax consequences when you borrowed it so it has no tax consequences when you pay it back.
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