I've got a big decision to make next year. I have 3200 sf of office space close to downtown Denver. I bought it in 2003 for 75/sf, and it has roughly doubled to about 150/sf in today's market. We recently decided that we would leave our business (i.e. retire), which currently pays us about 160k per year. We owe nothing on the office, and the property taxes are about 6500 per year. We can rent it for about 20/sf and will net around 25k if we keep it rented (I already have interested parties who would sign a long term lease).
So the question is this: will I pay more in capital gain taxes if I sell it during a year when I am still employed, or will I do better if I wait until 2017 when I will be living mostly off of savings? In other words, if I sell in 2016, will my tax burden be higher? I'm eventually going to sell it, regardless, but I am struggling with the timing of it and I don't have a good grasp of capital gain rules. The income would be nice to have over the next few years, but it's not vital early in my retirement.
Any opinions about this scenario? Did I give enough info for you to form an opinion or recommendation?