about to sell --- tax question

[kenmoremmm]

we're about to sell a townhouse bought in 2006 and used as a partial rental up through 2013 and a full rental through today. it's not a positive cash flow and with the seattle market being crazy, i figured it's good to get out on the up rather get stuck when inventory floods the market. i may be wrong..

anyway, i'm wondering if there are any things we should be looking to do on the tax front for the 2018 filing. we have been using a tax preparer for the past few years (lack of time, semi-complicated taxes) and he runs about $500. we were planning to do our own taxes this year, but now that we are going to sell in a few months, i'm wondering if we should just bite the bullet for 1-2 more years and use the tax guy still.

[Landslave]

For me, I earn enough to pay someone else.  I know my scope of expertise, and it is not in taxes.  I can earn enough in a day to pay my tax preparer for a year.  Even if it is no longer deductible, it is still a no-brainer for me.  But, if that $500 were a week's wages, I would not do it.  I would figure a way to get it done cheaper.  That may not be a frugal or Mustachian answer, but it is realism.  Good luck. 

[midwesterner1982]

You didn’t mention if you plan to reinvest the gains in other properties but if you are considering that you should research/ask your tax preparer about a 1031 exchange.  Can save you from paying capital gains tax.

[kenmoremmm]

yes, we are looking into a 1031. basically, we have benefited from an appreciating property with poor (negative) cash flow, and would try to invest in something that flows a little better and costs a lot less.

[jwright]

If you sell, rather than exchange, you will still have to deal with gain on the sale, depreciation recapture, and potentially carried forward losses from previously disallowed passive activity loss.  You accountant has this information already stored, so for me, it would be a significant time saver.  I would definitely not try to report a 1031 exchange without a professional.

And I think $500 for a tax return is cheap, but I worked at a firm with a $1,000 minimum.