What happens when I sell my property for more than its depreciated value?

Forum|Forum|7 years ago
June 6, 2019
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What happens when I sell my property for more than its depreciated value? I know this is basic r.e., but I am fuzzy.

Best answer by Coleen3

There are potentially two types of gain on the sale of a rental.

For example, if you bought the house for $100,000 and sold it for $200,000, you would have a $100,000 capital gain.

If you further took $25,000 of depreciation, the gain would now be $125,000 and the depreciation portion would be recaptured and taxed as ordinary income.

C

Coleen3Answer

Employee

There are potentially two types of gain on the sale of a rental.

For example, if you bought the house for $100,000 and sold it for $200,000, you would have a $100,000 capital gain.

If you further took $25,000 of depreciation, the gain would now be $125,000 and the depreciation portion would be recaptured and taxed as ordinary income.