topic TT overpaying on proceeds from rental property sale? in Deductions & credits

TT overpaying on proceeds from rental property sale?

WorthX — Sun, 13 Feb 2022 01:03:05 GMT

So, I'm in the process of entering the sale of a rental property last year and I feel like TT is overpaying on the taxes of the sale, so figured I'd see what, if anything I'm doing wrong.

Sold a rental property last year for $505,000. Original cost basis was $483,121, leaving gains of $21,979. However, closing costs of the sale and the realtors fees were $27000 which washes out any profit from the sale of the property. However, when I enter $505,000 in the field for "asset sales price" and $27000 into the "asset sales expenses" it's dropping my estimated refund from $5,200 (from my W2, etc.) down to $1600. Considering I didn't actually make anything from the sale of property after realtors fees, does that sound right?

Re: TT overpaying on proceeds from rental property sale?

Mike9241 — Sun, 13 Feb 2022 06:47:29 GMT

yes it does. you probably made money. your gain is sales price less tax basis in the property less selling costs PLUS all depreciation allowed (taken) or allowable which can be section 1250 gain tax at up to 25% look at form 4797

Re: TT overpaying on proceeds from rental property sale?

WorthX — Sun, 13 Feb 2022 13:13:52 GMT

I was wondering if it was the deprecation that was getting me here, since just based purely selling price and fees I actually lost a little money on the sale.

I'll take a look at that form, thanks!