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Bought rental condo for $44,500 in 2007. Sold in 2017 for $47000. It shows a profit of $18,888, Don't understand why it shows such a profit?

Forum|Forum|7 years ago
June 5, 2019
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TurboTax Self Employed Online

Best answer by TaxGuyBill

That is because you have been claiming depreciation, which lowers your "Basis".

So over the past 10 years, you have received about $16,000+ in tax benefits for claiming depreciation. That also lowers your "Basis", so it is sort-of as if your original purchase price was $28,000-ish. That creates a taxable gain.

T

TaxGuyBillAnswer

Employee

That is because you have been claiming depreciation, which lowers your "Basis".

So over the past 10 years, you have received about $16,000+ in tax benefits for claiming depreciation. That also lowers your "Basis", so it is sort-of as if your original purchase price was $28,000-ish. That creates a taxable gain.