Hopefully SImple Question on Real Estate Taxation

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egionesco
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Joined: Wed Sep 13, 2017 7:21 pm

Hopefully SImple Question on Real Estate Taxation

Post by egionesco » Fri Feb 16, 2018 8:27 pm

Hi all,

About twenty years ago my father passed away. With part of the life insurance check, my mother bought my two siblings and I a condo.

The house was put into all three of our names. We were 19, 17, and 15.

We are selling the condo. In the twenty years since it was purchased, it has depreciated as an asset.

I do not believe we will owe income taxes on the property because it has depreciated and was originally purchased in our names. Is this correct?

Thanks.

Gill
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Location: Florida

Re: Hopefully SImple Question on Real Estate Taxation

Post by Gill » Fri Feb 16, 2018 8:30 pm

If you are saying it is worth less than the original cost, yes, there will be no taxes on the sale unless it may have been rental property.
Gill

egionesco
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Re: Hopefully SImple Question on Real Estate Taxation

Post by egionesco » Fri Feb 16, 2018 8:33 pm

Thank you very much, I appreciate this.

The rental property thing could be an issue. We did rent it out for the last two years. The condo is selling for 20k less than it was purchased for.

I should not have said depreciation, that may not have been the right word. It just lost value because of the market.

mouses
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Re: Hopefully SImple Question on Real Estate Taxation

Post by mouses » Fri Feb 16, 2018 8:35 pm

Can they take some sort of a tax loss on this? (I am clueless, just asking because it occurred to me.)

denovo
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Re: Hopefully SImple Question on Real Estate Taxation

Post by denovo » Fri Feb 16, 2018 8:38 pm

egionesco wrote:
Fri Feb 16, 2018 8:27 pm
Hi all,

About twenty years ago my father passed away. With part of the life insurance check, my mother bought my two siblings and I a condo.

The house was put into all three of our names. We were 19, 17, and 15.

We are selling the condo. In the twenty years since it was purchased, it has depreciated as an asset.

I do not believe we will owe income taxes on the property because it has depreciated and was originally purchased in our names. Is this correct?

Thanks.
Not simple. Who was living there? Rental?

Gill
Posts: 4072
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Hopefully SImple Question on Real Estate Taxation

Post by Gill » Fri Feb 16, 2018 8:58 pm

It was probably depreciated based on its value when converted to rental use. You quite likely have no gain or loss but the exact figures would be needed to make that determination.
Gill

egionesco
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Joined: Wed Sep 13, 2017 7:21 pm

Re: Hopefully SImple Question on Real Estate Taxation

Post by egionesco » Fri Feb 16, 2018 9:58 pm

Thanks again for the responses.

Place was purchased for 135k in 1999. Is being sold for 119k.

I'm not sure what the rent was, my brother was in charge. He sent me one check but we basically got screwed by a renter and had to go through court and such to evict. In the end I think we made $1000 each from renting over the course of two years with no mortgage payment.

Edit: Changed sale amount to correct amount.

JGoneRiding
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Re: Hopefully SImple Question on Real Estate Taxation

Post by JGoneRiding » Fri Feb 16, 2018 10:24 pm

So for 18 years the property just sat empty?

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MP123
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Re: Hopefully SImple Question on Real Estate Taxation

Post by MP123 » Fri Feb 16, 2018 10:38 pm

Was the property depreciated for the two years it was a rental? You'll need to recapture that (even if you didn't take it).

We probably need more info.

Edit:clarifying this is depreciation on schedule e
Last edited by MP123 on Fri Feb 16, 2018 10:43 pm, edited 1 time in total.

egionesco
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Re: Hopefully SImple Question on Real Estate Taxation

Post by egionesco » Fri Feb 16, 2018 10:41 pm

Ah, sigh, thank you guys for the responses, this is going to be way more complicated than I thought. I guess I've got some reading to do, I was hoping the fact that it was a loss meant I didn't have to worry about it.

The property did not sit empty. All of us lived there for awhile, I left pretty quickly, but either my brother or sister lived there until 2015.

JGoneRiding
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Re: Hopefully SImple Question on Real Estate Taxation

Post by JGoneRiding » Fri Feb 16, 2018 10:49 pm

Ok so it was mostly a primary home that was converted to a rental.

At the time of conversion was the property worth less than purchase and did you document that?

egionesco
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Re: Hopefully SImple Question on Real Estate Taxation

Post by egionesco » Fri Feb 16, 2018 11:05 pm

JGoneRiding wrote:
Fri Feb 16, 2018 10:49 pm
Ok so it was mostly a primary home that was converted to a rental.

At the time of conversion was the property worth less than purchase and did you document that?
It was certainly worth less than the purchase but we did not document anything with regard to value. I'm going to contact my brother about the details and will post tomorrow when I have better information, thank you guys so much, I want to minimize the time you are giving me.

FBN2014
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Re: Hopefully SImple Question on Real Estate Taxation

Post by FBN2014 » Fri Feb 16, 2018 11:19 pm

For anyone that's interested, I have some timely information on how the new tax law affects real estate and how to structure your entities and transactions to gain the most benefit from the new law. Send me a private message if interested.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

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