Should I have to pay $40,000 in taxes bought a home in 1997 for $155000, lived in it until I rented it out in 2008 selling it for $260,000 in November 2017?

[capitalgains2017]

I have entered all required information concerning the rental, purchase and sales of this property and Turbo is saying I owe over $40,000 in taxes.  This doesn't even sound logical.

[Coleen3 · Accepted solution]

Possibly. You have a $105,000 capital gain. You did not say what your Adjusted Basis/FMV was on the date of conversion so I picked a middle of the road figure of $200,000. At 3.636% over 10 years that gives you a depreciation recapture of around $72,000. This is taxed as ordinary income.

[susancao]

I think you are getting charged capital gains on the home value increase because it isn't your primary residence and I am going to guess you are under 55?