Capital Gains Question

[Dan Vasile]

Hi Everyone, I’m confused about capital gains taxes on the sale of my rental property.  First a little background: I bought a condo in Florida in 2008 for $200k I lived in it as my primary home until 2013 at which point I started renting it out to a couple that has lived there ever since.  They are planning on moving away in a couple of months an I would like to sell the property, but don’t want to get burned on capital gains taxes.  The condo is currently worth about $500k so if I sell now I would be on the hook for $300k in capital gains taxes on the sale (plus depreciation recapture). I see that capital gains taxes are based on regular work income.  My wife and I make under the $77k yearly threshold for married couples, and everything I see is that there should be 0 capital gains, so would we not have to pay capital gains taxes?  Please let me know if I’m missing something.