My husband and I were married in 6/06. We both had primary residences. I sold mine and moved to his home. Then he was promoted and transferred 800 miles away, so we had to sell his home. He also sold a rental property in Alabama for $25,000. We have figured out the primary home issue, but what do we do about this rental property?
2007-03-27 10:59:29 · 2 answers · asked by juneaulady 4 in Business & Finance ➔ Taxes ➔ United States
If there was a gain on the rental property, it would be taxed as a capital gain even without the sale of your primary home. If he claimed depreciation on the rental home, that must be recaptured as regular income before the remained is taxed at capital gains rates.
2007-03-27 11:21:56 · answer #1 · answered by STEVEN F 7 · 1⤊ 1⤋
Well, if you both sold your primary residences for less than a gain of $250,000 each there would not be any taxes on the sale of those 2 properties. For the rental property, hopefully he had been taking declaring the income and expenses (including depreciation) for it on a Schedule E for his return. If so, then he would either have a gain or a loss depending on what he had remaining for his cost basis on the property (purchase less depreciation) and the expenses of selling the property (realtors commission, etc). The gain or loss would be reported on the tax return on Form 4797.
2007-03-27 12:27:06 · answer #2 · answered by Anonymous · 1⤊ 0⤋