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Woodman228
Level 3

Capital Gains Tax

What is my capital gain tax?    IE.   I bought rental house A in 2001 for 120K.    Sold rental house A in 2015 to upgrade (200K).   I bought another rental house B with that money for $250K.     In 2020, decided on rental house B to become my own house.    What would be my capital gain tax?  

5 Replies
soultax09
Level 5

Capital Gains Tax

You owe nothing on rental B because there is no disposition.....you converted it to personal use. If you did a 1031 on rental A then you also owe nothing but if not you would have had liability in 2015 which was the year you disposed of it.....no consequences for converting rental B to personal use until you sell.

Woodman228
Level 3

Capital Gains Tax

Ok....so lets say if I sell House B?

Woodman228
Level 3

Capital Gains Tax

Let say I sell the house in 2021?     What would be my capital gain tax?

DoninGA
Level 15

Capital Gains Tax


@Woodman228 wrote:

Let say I sell the house in 2021?     What would be my capital gain tax?


If you sold your primary personal residence and you lived in and owned the home for at least two years in the five year period on the date of sale, you do not have to report the sale if your gains are less then the exclusion amounts of $250,000 if filing Single or $500,000 if filing Married Filing Jointly (and both lived in the home for two years).

If you had a gain greater then the exclusion amounts then you would have to report the sale. Also, if you received a Form 1099-S for the sale either with a gain or a loss, the sale has to be reported.

 

Gain = Sales Price (-) Sales Expenses (-) Adjusted Basis (Purchase Price plus cost of improvements prior to the sale)

Woodman228
Level 3

Capital Gains Tax

This is a rental home.....not my primary residence.     What would be the tax liability?

 

Thanks

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