Message Font: Serif | Sans-Serif
No. of Recommendations: 0
I had a rental property which I quit renting in 2005, I used it as my vacation home and sold it in 2017. Do I have to pay taxes based on the depreciation ...


Your basis in the property has been reduced by the depreciation allowed or allowable during the time it was rented.

Any gain due to the depreciation taken is taxed similar to a short-term capital gain (so at ordinary income tax rates, not the lower rate for long-term capital gains), but is subject to a maximum tax rate of 25%. Note that this rate is a maximum. If your taxable income - including this gain - does not put you into the 25% (or higher) bracket, your tax rate on the gain due to depreciation will be lower.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.