What are the tax consequences, i.e. what is your capital gain and how much depreciation must you recapture?
If the house sells for $600k, which was my previous estimate, I'm estimating the following:
Federal & State capital gains tax: $38k
Depreciation recapture: $14k
Net proceeds after taxes/depreciation, RE commission & mortgage paid off: $296k
I actually met with my long time RE agent today to do a walk through for recommended repairs/improvements and the info I got from her suggested my potential selling price may be closer to $550k, which changes the tax/depreciation estimates to the following:
Federal & State capital gains tax: $31k
Depreciation recapture: $14k
Net proceeds after taxes/depreciation, RE commission & mortgage paid off: $257k
There's an extra wrinkle here too: the above numbers assume that 40% of the capital gains are tax exempt because this house has been my primary residence for the better part of a decade and I rented out the other 60%. I have recently stopped treating this as my residence (due to divorce) and I do not foresee myself living in this house in the future. The rental income numbers in the OP assume the house is fully rented so there is no additional profitability due to my moving out. If I choose not to sell within the next year or two, I lose that tax exemption and the entire house will be considered a rental.