ilmscore | Sale of a Rental Property Tax Consequences & Depreciation Recapture

Sale of a Rental Property Tax Consequences & Depreciation Recapture

Published: 2019-08-13
Status: Available | Analyzed

Predictions from this Video

Total: 3
Correct: 0
Incorrect: 0
Pending: 3
Unrated: 0
Prediction
Topic
Status
The tax rate for depreciation recapture on rental property sales is 25%, which is higher than the 15% long-term capital gains rate.
"the depreciation recapture rates are twenty five percent you know much higher than the 15 percent for long-term capital gains rates"
Depreciation Recapture Tax Rate
Pending
When selling a rental property with a gain, the portion of the gain attributable to depreciation recapture will be taxed at 25% up to the amount of depreciation claimed. Any remaining gain will be taxed at the long-term capital gains rate of 15%.
"so up to the extent of $50,000 of gain you will pay taxes at a rates of 25% on the first $50,000 of gains the excess the remaining $60,000 of gains in this example will get taxed at your long-term capital gains rates of 15%"
Depreciation Recapture Tax Rate Application
Pending
For properties rented out for extended periods (10-27.5 years), a majority of the capital gains upon sale are likely to be taxed at the 25% depreciation recapture rate.
"but in the event where you're renting out for ten years twenty years or twenty seven and a half years then that's a situation where probably a majority of your gains you know it could be a majority of your gains would be taxed at twenty twenty-five percent"
Impact of Rental Duration on Tax Liability
Pending