Captial Gains on sale of Investment property - Posted by Jen, Ca

Posted by David Krulac on May 08, 2000 at 05:21:48:

  1. if personal residence for 2 of last 5 years no tax on first $250,000 gain if single and $500,000 if married.
  2. Federal long term capital gains rate, longer than 12 months is 20% for most people, with ordinary income at 28% or greater. Recapture of depreciation taken since purchase is taxed at 25%.
  3. don’t know California rate.
  4. appraised value, asssessed value, and mortgage balance don’t enter into capital gains computation.
  5. take the gross sale price minus costs of selling like commission, transfer tax, deed prep. and fix up costs in the last 90 days. Then take the purchase price, minus depreciation already taken, plus capital inprovements. Subtract this figure from the first figure to determine the capital gains. Multiply times .2 for the federal tax and add .25 times the depreciation taken for the total federal tax.
    David Krulac

Captial Gains on sale of Investment property - Posted by Jen, Ca

Posted by Jen, Ca on May 07, 2000 at 23:36:02:


I was hoping one of you giving individuals might be able to answer a few question have?

I bought a rental property in 1989 for 97,000 in 2003 the mortgage will be paid off and I would like to sell.

My first question is, how will I be taxed here in California if I bought at 97,000 and in 2003 the rental property appraises for 155,000 (the current appraised value is 152,500)

Would it be 155,000 -6% (9,300 for sales commission) = 145,700 - 97,000 (what I paid for the rental property) = 48,000 for a capital gains?

At what rate does the IRS and State tax my capital gains of 48,000?

I was told that if I occupy the rental for the last two years before the sale I would not be responsible for capital gains tax is the true?

And lastly because I have been deprecating the property ever year on my taxes would there be any additional monies due to the IRS?

Thanks so much for your time