topic How to calculate tax in Get your taxes done using TurboTax

How to calculate tax

txs_my_lord — Tue, 10 Mar 2026 06:23:16 GMT

I recently sold a joint ownership (50/50) rental property for $600,000 (total). The closing cost and mortgage was $300,000 (total). So after paying off these the remaining is $300,000 (total). I should get $150,000, however, I agreed previously that I will only take $120,000. When filing tax return, how do I calculate?

Re: How to calculate tax after property sale

Anonymous_ — Tue, 18 Oct 2022 14:40:44 GMT

How have you been reporting the rental income and expenses in the past?

Have you been taking depreciation deductions on an annual basis?

Do you have a partnership agreement (either written or verbal)?

Will you be receiving (or have you already received) a tax reporting statement (a 1099-S)?

These answers to the foregoing questions will dictate how you should properly report your share of the proceeds (and gain) from the sale.

Re: How to calculate tax after property sale

Hal_Al — Tue, 18 Oct 2022 16:05:05 GMT

The mortgage payoff is irrelevant. The $300,000 net proceeds is irrelevant. What's relevant is the capital gain. Net sales price (after expenses, but not mortgage) less cost basis. Then comes "depreciation recapture", an increase in your capital gain, but taxed at a different rate.

In determing how to report the split, you usually follow the money. As tagteam said, more info is needed.

Re: How to calculate tax after property sale

txs_my_lord — Tue, 18 Oct 2022 17:59:40 GMT

Have you been taking depreciation deductions on an annual basis?

Didn't claim depreciation at all and will file Form 3115 next year

Re: How to calculate tax after property sale

Anonymous_ — Tue, 18 Oct 2022 15:57:53 GMT

@txs_my_lord wrote:
Have you been taking depreciation deductions on an annual basis?

Didn't claim depreciation at all and will file Form 3115 next year

The need to have a 3115 prepared coupled with the fact that the sale is part of a divorce settlement calls for guidance from a local tax professional.

Preparing and filing Form 3115 is not a DIY endeavor.