Context: I bought a rental property in 2019 for 341K. When reporting for taxes, I have entered basis for depreciation as 266K (valuation by the county) as I didnt understand it at that point. 266K is used for depreciation deduction of ($5244). In 2023 return the "allocable share of the unadjusted basis immediately after acquisition" shows as $156400.
Question: I am selling the property now for 485K after spending 20K in upgrades and about 30K in commissions/taxes. My actual investment is 361K (341+20) and return in 455K (485-30). How does this relate to UBIA mentioned above? Will I pay long term cap gains for $106K ?
You have long-term capital gain and depreciation recapture as a component.
However, how did you arrive at the $5,244 figure? What is your accumulated depreciation figure?
$5244 was calculated by Turbotax in my 2019 tax return - first year of purchase. As I mentioned I entered my cost basis as 261K (by mistake instead of 341K. 261K is the county evaluation). It has 27.5 years in the same line item - I am assuming it did the math.
Where do I find accumulated depreciation figure in my latest return? I have always used Turbotax and it automatically ppopulated my rental unit data.