Thinking about selling your Rental Property? Before you decide whether to sell or continue renting the property, you first need to know the tax impact of selling.
Recent Analysis Examples
Example 1
Client asked us to calculate additional tax if he sold rental property held since 2008.
| Analysis Assumptions | |
| Rental Property Current Basis | $128,955 |
| Depreciation | $53,592 |
| Sale Price (Projected) | $420,000 |
| Capital Gain | $326,242 |
| Combined Wages | $117,000 |
Tax Impact of Sale: $61,500
This client chose to rollover his capital gain to another property; he sold this property and bought another using tax code provision, the 1031 Exchange. $0 Capital Gains.
Example 2
Another client asked us to calculate additional tax if she sold rental property held for four years.
| Analysis Assumptions | |
| Rental Property Current Basis | $346,764 |
| Depreciation | $41,539 |
| Sale Price (Projected) | $440,000 |
| Capital Gain | $112,500 |
| Combined Wages | $151,000 |
Tax Impact of Sale: $19,500. The client decided to list and sell this rental property
There are several components involved in calculating the tax impact of selling a capital asset. Your total tax impact will be a combination of capital gains tax and additional ordinary tax; and all these calculations depend on your other taxable income.
The Tax Shop can help with these important tax impact calculations.
