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Started By
Message
Selling a home question.
Posted on 1/4/26 at 10:44 am
Posted on 1/4/26 at 10:44 am
Trying to find the exact right details. Online research is inconsistent.
I have a home I bought in Oxford for $140k in 2015. It is appraised for for triple and I am considering selling it since I have moved away and probably have no interest of returning. I lived in the house for a total of five years - 2015-18 and then 2021-23.
This year marks the magic two in five years rule for capital gains. I am thinking of selling. However, someone told me that since I didn't live in it the whole time, I would have to pay some fees like recapture depreciation as it was a rental in the years between. Says it offsets the appreciation of the home in the years I didn't live in it.
The home appraises for triple now than it did then so the tax savings is not insignifcant, but I want to make sure I am not slaughtered with unexpected tax that blindsides me later.
I have a home I bought in Oxford for $140k in 2015. It is appraised for for triple and I am considering selling it since I have moved away and probably have no interest of returning. I lived in the house for a total of five years - 2015-18 and then 2021-23.
This year marks the magic two in five years rule for capital gains. I am thinking of selling. However, someone told me that since I didn't live in it the whole time, I would have to pay some fees like recapture depreciation as it was a rental in the years between. Says it offsets the appreciation of the home in the years I didn't live in it.
The home appraises for triple now than it did then so the tax savings is not insignifcant, but I want to make sure I am not slaughtered with unexpected tax that blindsides me later.
2
Posted on 1/4/26 at 10:49 am to rpg37
You get 250k (500k if married filing jointly) capital gain exclusion if you qualify with the 2 of last 5 years.
If at any point in time you rented the property in question out, you’ll need to deal with the depreciation recapture for the depreciation for the time it was rented.
Please note: you have to account for depreciation recapture even if you did not take the depreciation in the years it was rented out.
As always, speak to a tax professional.
If at any point in time you rented the property in question out, you’ll need to deal with the depreciation recapture for the depreciation for the time it was rented.
Please note: you have to account for depreciation recapture even if you did not take the depreciation in the years it was rented out.
As always, speak to a tax professional.
Posted on 1/4/26 at 10:58 am to horsesandbulls
How do I calculate recapture? Do I have to look at every old tax return and add them?
Posted on 1/4/26 at 11:19 am to rpg37
You will need to know how much total depreciation should have been taken while the property was in rental use.
Start with old tax returns but you’ll also need to calculate depreciation that wasn’t taken but should have been.
Residential property has a useful life of 27.5 years.
There are a ton of depreciation recapture estimators online to give you an idea but if you’ve had the same tax software used for those tax returns, it could calculate this for you without you doing a whole lot of digging.
Start with old tax returns but you’ll also need to calculate depreciation that wasn’t taken but should have been.
Residential property has a useful life of 27.5 years.
There are a ton of depreciation recapture estimators online to give you an idea but if you’ve had the same tax software used for those tax returns, it could calculate this for you without you doing a whole lot of digging.
Posted on 1/4/26 at 11:30 am to horsesandbulls
My CPA always takes it out, I just didn't know if that was a running total or not.
Posted on 1/4/26 at 12:26 pm to rpg37
It’s a running total. Your cpa will know what to do.
Posted on 1/4/26 at 4:03 pm to rpg37
Can I ask what part of Oxford? Pricing there is stupid crazy compared to say 2020. But our daughter is still there .. renting. Doubt she’ll ever be able to buy there while shes single.
We love Oxford. Except on game weekend. lol.
We love Oxford. Except on game weekend. lol.
Posted on 1/5/26 at 8:30 am to horsesandbulls
quote:
It’s a running total. Your cpa will know what to do.
Agree. My CPA includes the running total by property with each return. Should be easy to find.
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