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burgur

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Posts: 1
Reply with quote  #1 
I have a question regarding tax laws and the sale of properties.
 
Here's a little background.  I have lived in my home for about 3 years, and my last home was converted into the rental property 3 years ago, thus I lived in the now-rental property 2 out of the last 5 years.
 
A situation is coming up where I may sell both properties in 2014.  I expect to sell the current home at a small loss.  The rental property may end up with a small profit (largely due to depreciation taken in the past 3 years).  I understand that both properties individually qualify for the 250,000/500,000 capital gains tax deduction, but if I do end up selling both properties, I can only take the deduction on one of them because the sales will not be two years apart.
 
How will this scenario play out?  Hypothetically if I sell the home at a small loss in March and sell the rental property in April with a small gain, is it my choice to specifically apply the deduction to the sale of the rental property?
 
Are there other questions I should be asking myself but might not be aware of?
 
Thanks in advance for your help!
NoNonsenseLandlord

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Posts: 178
Reply with quote  #2 
You will recapture the depreciation at a 25% federal tax rate.  Any appreciation in land or buildings you pay capital gains on the gain, which is off set buy the limitation.

Get an accountant.

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