Major life milestones often have a major tax impact. Changes in your marital status, having a baby or adopting a child can have significant impact on your taxes. This is the place to ask questions about dependents, real estate, and other various scenarios that play a significant role in what taxes you pay.
07-31-2013 12:56 PM
I filed my 2012 taxes on-time back in April, but I'm still trying to figure something out that I think I may have done wrong. It's all related to selling a rental property and calculating whether I had a gain or a loss on it. I read IRS pubs 523, 527, and 551 several times. They're very confusing to me. The way I understand it, I have to add up the depriciation I deducted while I was renting the house and then subtract that amount from basis. When I do that, I come out with a gain of nearly $30k even though the house lost value the whole time I owned it. Can anybody help explain the rules here? I just can't understand how anybody ever makes a profit on rental porperties if this is really how it works...
Here's the timeline:
- bought house A in May 2004, family and I lived in it for 2.5 years
- bought house B in Nov 2006, family and I moved there
- tried to sell house A for over a year, couldn't get any reasonable offers
- began renting house A in Feb 2008
- sold house A in Oct 2012
Solved! Go to Solution.
07-31-2013 03:13 PM
10-14-2013 11:44 AM
I have the same situation in reference to buying, living in and then trying to sell. However, it differ in that it is still a rental. I want to try selling it but it has loss value as well. Purchased at 185000 and property in that area is selling at 165,000. My agent stated that I would have to bring 6000 (after commission and closing cost) to closing IF it sold at 165000. QUESTION: Can I deduct this amount from my taxes?
10-17-2013 07:16 PM
10-18-2013 10:12 AM
Thank you for your response. Very helpful.
Now I have another question. I have been approached by a realtor who is representing real estate investors. They want to purchase my home. I have been taking approximately $5000 in depreciation every year. I think that if I sold my house that I would have to pay 25% back to the IRS on the total amount of the depreciation, $30,000, that I took for the past 6 years amounting to $7,500. Am I understaning this correctly?
10-18-2013 02:20 PM
02-14-2014 12:17 PM
I sold a rental property in 2013. I completed Form 4797 ( Sales of Business Property) with a gain of $12. When that amount was transfered to Schedule D (Capital Gains and Losses) it shows a net long-term gain of $464 and this was shown on the 1040 line1 13 as a capital gain. Can someone explain why?