Join Early Retirement Today
Thread Tools Display Modes
I know, I know...Ask a Tax Pro...
Old 04-09-2007, 04:44 PM   #1
Recycles dryer sheets
Join Date: Feb 2006
Posts: 85
I know, I know...Ask a Tax Pro...

He's a little busy at the moment, doesn't want to answer my house questions until next month.

I have a rental house that I'm considering selling. I'm in California, the house is in Idaho. Help me understand how the sale will be taxed?!? I'm just feeling like this is a risky investment. I know it's made money even if it flows slightly negative. Between the distance, and the 10% management fees, I feel like now's a decent time to cut and run. The market in Idaho is still going fairly well.

As I understand it, I take the sale price minus the purchase price (and any selling costs) and pay 15% on that money.
I'll also pay 25% on the depreciation.

Do I have this right? What about state tax? What else should I be considering in this decision?

If you lend someone $20, and never see that person again, it was probably worth it.
devo is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: I know, I know...Ask a Tax Pro...
Old 04-09-2007, 06:00 PM   #2
Recycles dryer sheets
bearkeley's Avatar
Join Date: Aug 2005
Posts: 299
Re: I know, I know...Ask a Tax Pro...

It's not that simple. General gist is what you described but things like AMT and State Taxes would make a difference. We ended up paying a lot more than 15% (what we expected) because of the AMT. Check out old posts on this...there's quite a bit on this site about this from others. Good luck!
bearkeley is offline   Reply With Quote
Re: I know, I know...Ask a Tax Pro...
Old 04-09-2007, 07:12 PM   #3
Recycles dryer sheets
Join Date: Nov 2006
Posts: 77
Re: I know, I know...Ask a Tax Pro...

If you have been depreciating the rental, which you should have been doing, then you have to adjust your purchase price down which will increase your profit. And in CA, you will be paying up to 9% to Arnold since any profit is considered ordinary income to the State.
Anansi is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
tri-country tax evasion? lazygood4nothinbum FIRE and Money 2 12-30-2006 07:03 PM
Taxes tryan Other topics 0 12-08-2006 07:45 AM
When are estimated tax payments necesary? WanderALot FIRE and Money 12 04-18-2006 04:54 PM
Tax compliance costs 22c for every dollar collected cute fuzzy bunny Other topics 15 01-19-2006 02:36 AM
Bush floats a national sales tax dex FIRE and Money 22 08-17-2004 07:15 AM

» Quick Links

All times are GMT -6. The time now is 07:57 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.