All Forum Posts by: Brian Morissey

Hi,

I am considering selling my rental property which I purchased for $380k 11 years ago and currently has a market value of $330k. I am not breaking even on the rent, hence rather sell. I am married with combined yearly income of $150k+ . I have 3 questions:

1) How will a 50k loss affect my taxes if my combined income is 155k? Is it favorable or not favorable? I heard some deductions are phased out after $150k.

2) Should we hold on to the rental property that's under water (Sacramento, CA), or sell it at a loss and buy another one in another city where housing prices/rent is appreciating faster (San Jose, CA) with much higher rents? Which one is more favorable in terms of taxes?

3) Since I am selling at a loss, do I have to worry about depreciation recapture? I've used Turbotax over the years and if I model the sale of the property in Turbotax Premier, it does not show I have to pay taxes (assuming my income stays the same). In fact, Turbotax shows that I will get both a federal and state tax refund.

Thanks in advance!

Brian

Hi,

I am considering selling my rental property which I purchased for $380k 10 years ago and currently has a market value of $310k.  I am married with combined yearly income of  $150k+ .  I have 2 questions:

1) Are 1031 exchanges recommended only if investment/rental property sale generates income? In our case we are selling at a loss.

2) Should we hold on to our rental property that's under water(Sacramento, CA), or sell it at a loss and buy another one in another city where housing prices are appreciating faster(San Jose, CA)?  Which one is more favorable in terms of taxes?

Thanks in advance!

Brian