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Author: inparadise Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121591  
Subject: Offsetting cap gains on rental Date: 7/28/2002 2:51 PM
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We are in the process of selling a rental property on which we should have about $40K in capital gains, (selling price - recent fix up costs - realtor fees - transfer taxes- original purchase price,) and about $32K in depreciation that needs to be recaptured.

We are carrying a substantial amount of capital losses from stock that we can realize to offset the $40K in capital gains. We also probably have enough losses to offset the depreciation recapture. Can that be done, or are we stuck for the roughly $8,000 in taxes on the recaptured depreciation?

TIA,

InParadise
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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 61029 of 121591
Subject: Re: Offsetting cap gains on rental Date: 7/29/2002 2:31 AM
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We are carrying a substantial amount of capital losses from stock that we can realize to offset the $40K in capital gains. We also probably have enough losses to offset the depreciation recapture. Can that be done, or are we stuck for the roughly $8,000 in taxes on the recaptured depreciation?

Your stock losses can offset both the capital gain and the depreciation recapture on the sale of your rental property. You'll offset the capital gain portion first, then the depreciaton recapture.

--Peter


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Author: inparadise Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 61032 of 121591
Subject: Re: Offsetting cap gains on rental Date: 7/29/2002 8:46 AM
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Your stock losses can offset both the capital gain and the depreciation recapture on the sale of your rental property. You'll offset the capital gain portion first, then the depreciaton recapture.

Great news! Thanks Peter! Off to find the regs.

InParadise

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