Will I have to pay capital gains tax on the sale of my condo?

I have owned my condo for twelve years. I lived in it for the first six years and have been renting it out for the last six. Will I have to pay capital gains if I sell it, given that the last six years it has been an investment property? 

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  • 4 weeks ago

    Yes.  You won't qualify for the exclusion for sale of a primary residence (since it's not your primary residence) and your "basis" will be adjusted by what you deducted, or could have deducted, for depreciation during the time that it was a rental property.

  • 4 weeks ago

    Yes, you get a 250k capital gains exemption for your primary residence but only if you lived there 2 of the last 5 years.  Luckily the capital gains tax isn't huge but you will have to pay it.  I guess you could move into the place for 2 years if you want to avoid the tax.

  • 4 weeks ago

    Yep. You will owe capital gains. BUT--whether you have to pay them is a different answer. you can avoid capital gains and depreciation recapture taxes by rolling the proceeds of your sale into a similar type of investment within 180 days. This like-kind exchange is called a 1031 exchange after the relevant section of the tax code.

    You may also convert your rental condo into your primary residence and avoid the tax. OR you may pair your gains with losses--and offset the gains. There are plenty of ways to avoid paying the capital gains on rental property. I wouldn't worry about it until you've consulted with your CPA or accountant, or read up on the full extent of the capital gains laws. 

  • Eva
    Lv 7
    4 weeks ago

    Yes.  You've been out of it too long to qualify for the principal residence exemption.

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  • 1 month ago

    Yes, you will owe capitol gins on any profits.  

  • R P
    Lv 7
    1 month ago

    Yes, considered income. Pay tax on the recapture of the depreciation you took on your taxes as that is considered income.

  • Judy
    Lv 7
    1 month ago

    yes you will..................................................

  • 1 month ago

    you need to live in it 2 of the last 5 years to avoid the tax.  prices were at their highest 12 years ago, properties in my condo complex are still about 25% less than the max of 2008...no profit, no tax.

  • 1 month ago

    You will owe long-term capital gains tax. You must live in it for two of the last five years you own it to qualify for the exemption.

    That said, you might not owe much tax. It all depends on how much of a profit and what your other taxable income is the year of the sale.  You can pay as low as 0%, 15% or 20%.

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