Author Topic: depreciation and the recapture and 1031 exchange questions  (Read 380 times)

BORN SAVER

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depreciation and the recapture and 1031 exchange questions
« on: December 10, 2023, 12:25:10 PM »
hey guys trying to understand depreciation. i understand its the building value / 27.5 for a residential rental property. so lets say its a 200k property / 27.5 = $7,272.72 can be deducted from the tax. so lets say you brought in 18k that year from that property. the part that could be taxed would be $10,7272.28 correct?

1. can repairs to the property also be deducted form the taxable amount or is that captured  in the depreciation formula.

2. can your property taxes and water bills be ducted from that amount?

3. i don't exactly understand the recapture. say i had the property for 10 years and go to sell. that would mean that $72,720 would be taxable from the recapture and if the property sold the at 300k the taxable gains would be $172,720.00?

4. i dont exacly understand the point of it except to possible help acquire your second property faster. cause personally id rather not pay the capital gains back from the depreciation. but from my understanding its not legal to not claim deprecation.

5. i know there is a 1031 exchange but that seems like a hassle and would make you rush into another property and maybe not get the best deals. whats your thoughts?

6. also with the 1031 exchange does it have to be a property of more value or can you divvy it up into multiple smaller property's?


BORN SAVER

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Re: depreciation and the recapture and 1031 exchange questions
« Reply #1 on: December 10, 2023, 12:28:40 PM »
7. also what do you guys do with your gains from the rental property's because i imagine its in a different bank account then your personal. i with thinking why not put a portion of that money into something like VTI while you what to get enuf money to buy your next property. if i would do that what type of account would i put it in and would it have to be some kind of business' account.

BORN SAVER

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Re: depreciation and the recapture and 1031 exchange questions
« Reply #2 on: December 10, 2023, 12:32:09 PM »
8. if my rental property was my primary residence for say the first 3-5 years i owned it how would that play into the capital gains and deprecation.

 

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