Tax implications of selling my property?

[slappy]

I sold my rental property in March of this year.  I bought it on 10/26/07 for $70,900 and sold it for $59k.  From what I can tell from Turbo Tax, the depreciation amount was $17852 for the past 10 years. How will this impact my taxes next year? I guess I'll still need to claim the income from Jan and Feb, but how will the sale affect things? 

[NoNonsenseLandlord]

You will have capital gains, and you pay tax on them.  17,852 + 59K  = 76,852. 

76,852 - 70,900 = 5,952.

You have $5,952 in gains.

If my math is right.

[slappy]

You will have capital gains, and you pay tax on them.  17,852 + 59K  = 76,852. 

76,852 - 70,900 = 5,952.

You have $5,952 in gains.

If my math is right.

Wow, I am just seeing this now. Thank you for your response! That's about what I thought, too.

[SeattleCPA]

You may need to include passive suspended losses accumulated over the years in your calculations... these could shelter your gain and even create a lost.

Check the form 8582 from last year's tax return to see if these exist...

[slappy]

You may need to include passive suspended losses accumulated over the years in your calculations... these could shelter your gain and even create a lost.

Check the form 8582 from last year's tax return to see if these exist...

Thanks. There is nothing there. However, is it true that my capital gains tax rate is 0 because I am in the 15% tax bracket? AGI last year was $63k, MFJ. Does that mean I actually wouldn't owe any taxes?

[Mr. Green]

You may need to include passive suspended losses accumulated over the years in your calculations... these could shelter your gain and even create a lost.

Check the form 8582 from last year's tax return to see if these exist...

Thanks. There is nothing there. However, is it true that my capital gains tax rate is 0 because I am in the 15% tax bracket? AGI last year was $63k, MFJ. Does that mean I actually wouldn't owe any taxes?

That is correct! One of the benefits of long term capital gains income when you're in the 10% or 15% tax bracket.

[slappy]

Well that is great news! Thank you all for the help! :)

[conpewter]

You'll want to check with a tax guy but I have unfortunate news.

The amount you "made" on the rental seems like it is subject to depreciation recapture, which doesn't follow the rules of capital gains taxes.

The more I read about it the more it seems it is taxed as income in the year you sell? (seems strange)
Seems like it is capped at 25% so even if you were in a higher tax bracket it wouldn't be taxed more than that

https://www.irs.gov/publications/p544/ch03.html#en_US_2016_publink100072556

[slappy]

You'll want to check with a tax guy but I have unfortunate news.

The amount you "made" on the rental seems like it is subject to depreciation recapture, which doesn't follow the rules of capital gains taxes.

The more I read about it the more it seems it is taxed as income in the year you sell? (seems strange)
Seems like it is capped at 25% so even if you were in a higher tax bracket it wouldn't be taxed more than that

https://www.irs.gov/publications/p544/ch03.html#en_US_2016_publink100072556

Well that is interesting. Technically I sold the property for a loss. The only gain would be because of the depreciation recapture. I wonder if that makes a difference.

Edit: So I bought for $70k and sold for $59k. By the way that is worded, it makes me wonder if it only applies if I had sold for over $70k, thereby incurring an actual gain.