The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: tax basis in real estate Date:  5/7/1999  6:37 PM
Author:  DonnaG Number:  15343 of 127613

You are close on how to calc the tax gain on the sale of your rental property. The taxable gain is the net difference between the net sales price (gross sales price less commissions, less any closing costs you paid for the buyer) less the tax basis. The tax basis is: Original cost PLUS closing costs not previously deducted (such as origination fees or property taxes) PLUS any improvements LESS accumulated depreciation. If the gain is less than the amount of your depreciation, it is all ordinary gain, taxed at your marginal rate. If the gain is greater, then any excess over the A/D is capital. And I assume that you have held the property for over a year, so the gain would be long term?

You can run through the numbers to see where you might stand, but you are right to contact your accountant for the final say so! Good luck getting ahold of her / him. It actually should be a little easier, now that the 15th is over......

Good luck!

p.s. Didn't you deduct the property tax fees as you went along? If not, you can deduct them, too.

Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us