Considering selling my STR - Some tax questions - Some general

[Andrew Simms]

I have a mountain cabin in WNC. I really enjoy running the STR, providing great value for our guests and ensuring they have an excellent time. There's something fulfilling in it. That said, it is a financial decision first and foremost. We have an opportunity to buy-out one of the partners in our family farm. Just assume there is not a return involved in that. Just a personal desire to do this (many reasons, likely none of which are important to the awesome folks on this forum). We could probably manage the payments without selling the cabin; however, it would provide significant cushion and allow us to pursue some other opportunities.

Financial Details:

Purchase price: $264k (February 2021)... probably put in $36k to be rent ready. Based on my records, we did $11,550 in depreciable improvements. Interest rate: 2.875%. Insurance $1200/yr. Taxes $1200/yr

Net Income: 

2022 = $6,274 (before depreciation); Gross $51k; 62% occupancy

2023 = $5,236 (before depreciation); Gross $45k; 57% occupancy

2024 has seen so far, a decline in bookings. But that was kind of expected given the time of year. Things usually pick up starting in April. We also opened up to dog friendly. 

We have had nothing but 5-star reviews on VRBO, and nearly all 5-stars on Airbnb. Our cleaner has indicated we are one of her busiest clients. 

Potential Sale price per our realtor: $469k-$489k. I had looked up comps before her CMA and can confirm this is reasonable. It is also in line with some properties that are currently for sale. Ours has some features that probably give us an edge.

I know I will owe taxes here and hopefully someone can shed some light on that. My numbers may not be spot on, but assuming:

Sale price of $469k (6% agent fees), basis of $264k, Total deprecation taken $24,600 (adjusted basis $239.4k). Amount subject to capital gains and depreciation recapture: $469k * 0.94 - 239.4k = $201,460.

I would owe depreciation recapture (25% rate x $24,600 =$6,150), capital gains (15% rate so $26,500), state tax (North Carolina 4.75% so $5,100). 

Are capital gains taxes progressive? For instance, is the first 94k (we are MFJ) at 0% and the next at 15% or is it all 15%. Our AGI is likely over $250k this year, so we would also have the 3.8% medicare surtax I believe. How is the surtax applied? 

I have probably rambled on enough. BP fam - what would you do? Not looking to 1031 because I can't with the family farm structured the way it is. Any questions - fire away! Thank you all in advance.