Taxes on Sale of investment property

…Just sold an investment property that my parents lived in and left to me. I leased it out for 15 years after they passed. I file married jointly and our AGI is around 50K …What kind of taxes will I realize in 2021 filing…Thanks

@redandwhite good question. That’s probably an accountant question though (unfortunately).

@redandwhite Definitely an accountant question. For a guesstimate - Take your sales price less your pre-sale fixup, marketing and sale costs to get a Net Sales Price.

Then take the value of the property in your parents estate plus whatever improvements you made less any depreciation you took. That is your Adjusted Basis. Subtract your Adjusted Basis from the Net Sales Price and that is your Gain on Sale.

Take your Gain on Sale and subtract the depreciation you took and that is your Long Term Capital Gain. The depreciation is recaptured and taxed as Ordinary Income.

Clear as mud? The numbers should be big enough to justify the cost of a tax professional. There are a bunch of other rules that a CPA may be able to use to your advantage - or not. Good luck. Next time maybe think about an exchange.

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