Considering selling a rental property in Texas

[Aviance Betts]

Good morning,

I purchased my first home, a townhouse, in 2005. I quickly learned I was a nomad and moved after a year. I listed it as a rental property in 2008, and I have been renting it ever since. I am looking to sell, but I am concerned about capital gains and depreciation recapture. I purchased it for around 100K, and it's worth about 230K now, with a loan balance of around 52K. Would it be profitable to sell or better to complete a 1031 exchange? I am an expat, so I am not heading back to the US to live anytime soon. I appreciate anyone's assistance. Have a great day!

[Joe Vesey]

If you don't need the cash, then a 1031 exchange could be a better deal in my opinion.  Your Federal Capital gains are typically 15 or 20% and depreciation recapture is 25% of the amount that you depreciated the property while you owned it.  Always discuss w your CPA to make the best decision for your specific situation.