Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.
09-08-2017 06:19 PM
Solved! Go to Solution.
09-09-2017 11:27 AM
Welcome to the H&R Block community.
Since this is a rental house you will need Form 4797 and Schedule D to report the sale.
Your tax liability will depend on your gain from the sale, so you'll need to know your adjusted basis in the property. Your gain is taxed at either 0%, 15%, or 20% depending on your income level including the gain. Your adjusted basis is figured by:
PURCHASE PRICE + COST OF IMPROVEMENTS - DEPRECIATION TAKEN - ENERGY & CASUALTY DEDUCTIONS & CREDITS = ADJUSTED BASIS
Your taxable gain is figured by:
SELLING PRICE - SELLING EXPENSES = REALIZED AMOUNT - ADJUSTED BASIS = GAIN ON SALE + RECAPTURED DEPRECIATION = TAXABLE GAIN
In your situation, assuming that your ownership shares in this rental are split 50/50, your basis is equal to 1/2 of the total basis in the property. This fraction will be either larger or smaller depending on what your share of the property actually is.
So as you can see there is quite a bit to this one. A tax professional can be of assistance with things like home sales so I do recommend that you meet with one when you get ready to complete your tax return. I can also guide you in the right direction from here as well.
If you have any other questions I'll be glad to help.
Senior Tax Advisor (Tampa, FL)