Taxes to sell rental property

[Ryan N.]

Looking to see how much in taxes I would pay to sell house.

Paid=$123k

Selling=$180k

Owe=$89k

Located in NC

Owned house 16 years but have not lived in home in over 6 years.

Got ruff estimate on how much in taxes I will have to pay?

[Wayne Brooks]

Yes, for a 1031 exchange to defer all taxes you must do things:

1) buy the same value or more as you sell for (less direct selling costs)

2) reinvest all of the cash proceeds from the sale

For a straight up sale, rough numbers:

Assuming you spent $10k or so on improvements, roof, a/c replacement, etc (ignore if you didn’t)

Your basis would be $133k

Depreciation deduction over 6 years, roughly $3500/yr (building value only, plus any improvements/27.5 years, assuming value at time of rental conversion exceeds your cost basis) $21k taxable at your ordinary income tax rate, Max 25%.

Cap gain, assuming $170k net proceeds from sale;

$170k minus $133k (if you had $10k in improvements)=$37k taxable as cap gains at likely 15-20%

Of course the exact numbers and your personal income situation determine the exact numbers