Another case study

[Scott W.]

I wound up renting out my primary house last month & bought a home for us doubling the square footage...it's beautiful! It was an owner occupied. Agreed to $245k & it appraised at $237k so sellers had to lower the price again, much to our surprise!

Anyways, this is our 2nd rental - here are the numbers:

Rent $1450

PITI $1302

Principal $385/month (18 years left at 4.375 % refied 2 years ago to a 20-year fixed)

I should mention I put 20% on this home in 2003 for $195k purchase price (Again, I bought it at owner occupied). Zillow shows $151k value today; appraised at $165k 2 years ago when refinanced.

I'm assuming my cost basis is $195k so will pay no capital gains tax until sell it? currently owe $128k on it.