Posted by Dave T on November 08, 2000 at 01:53:58:
You don’t give enough information to give a definite answer. The tax treatment your property receives depends upon its holding period and its use.
If the property you reference was used as your personal residence at the time of sale, then there is no depreciation, no depreciation recapture, and probably no capital gains tax either (subject to the $250K/$500K MFJ exclusion).
If the property you reference was used as investment property for 12 months or more, then the capital gains tax rate is less than the depreciation recapture rate. If you are in the 28%+ tax bracket, then the capital gains rate is 20%. The depreciation recapture rate is 25%. Please note that while the depreciation recapture rate is higher, the actual tax paid at this rate MAY be less than the capital gains tax (depending upon how much of the asset has been depreciated).
If the property in question is a second home (vacation home), then the property is considered personal property. The profit on the sale is ordinary income, taxed at your ordinary tax rate. No depreciation recapture or capital gains tax treatment would apply here.
Consult a tax professional for a specific determination based upon your circumstances.