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Updated about 1 month ago, 10/13/2024
Cost seg depreciation recapture model
Can anyone quickly share a math model of a the depreciation recapture scenario below? Thanks in advance for considering.
Purchased a home for $700k
Completed $25k in renovations
Completed a cost seg study (80% bonus) that resulted in $80k in passive losses for that tax year
What if we now sold that property for $800k. Home would have been held for 5 years total. We are not eligible for capital gains sheltering under the 2 out of the last 5 years rule. We have a combined personal tax rate of 30%. What would a taxation model look like in this scenario? We are over planners and want to know what type of restraints we have put on our exit routes. Ideally we hold forever (cash flow positive) or we 1031 to another property.
Thanks in advance. Let me know what other details are needed to answer fully.