Everyone's advice has most always been to sell our rental home (prior posts). Apparently I'm pretty hard-headed- I'm just now getting around to it. I had a realtor out to give me estimated/potential selling prices for our primary home and our rental home, and the realtor said he would list our empty rental for sale at $165k (primary home not such a hot commodity). This is great news, as that means we turn a profit! So, two general questions for you MMM financial geniuses:
1. Anyone care to check my (ballpark, estimated) understanding of capital gains tax if given:
Capital Gains Tax Liability:
sales price 165,000.00
adjusted basis (113,400.00)
capital gains tax liability 51,600.00
federal tax, 15% of 51.6k (7,740.00)
state tax, 5% of 51.6k (2,580.00)
depreciation taxed at 25% of 51.6k (7,736.50)
(18,057)
Net:
Sales price 165,000
Mortgage balance (100,000)
Costs/fees/commissions (15,000)
55,000
Less taxes (18,057)
Take Home Profit 36,943
Obviously, the "take home profit" fluctuates based on selling price. We honestly think this number is too high, and think our take home might realistically be more like $26,000.
2. Here's what we are planning to do with this windfall:
A. pay off credit card balance (if there is one), currently $2600
B. pay off car note, currently 16,392 (FYI, after car is paid, only other debt is mortgage balance at $250k at 3.75%).
C. Fund Roth IRA's for both, $11,000 (if take home is less, then Roth's will be funded to balance remaining from sale after A, B paid).
D. upgrade home insulation, $6000*- I think this should be taxable investments, or maybe saved so I can max my TSP and use this if needed; but we really want to do the insulation.
Ae my numbers realistic? Or any different thoughts on how to use the money?