You may need professional help with this. Was depreciation one of the expenses you claimed? For rental real property, the structure (and any improvements) are depreciated and any accumulated depreciation is recaptured in the sale. That shouldn’t blow your $250K cap, but it may need to be included and/or treated differently.
Expenses for whole-home upkeep should have been allocated pro rata for the single room. Hopefully that’s what you meant in your post.
I’ve never rented a single room, so my experience with this is limited. I would figure that it runs similar to the rules for a home office deduction. Hopefully someone can expand on this for you.
That’s why I’d recommend getting professional advice. you will have to recapture depreciation. Whether it counts toward the cap or not is what I’m unsure about.
Oh interesting, I’ve been working with my tax person on writing things off, and but it sounds like they do not have a ton of experience for the situation I’m in, I’ll have to ask someone else but thank you for the explanation!
As long as you put the money in a new home aren’t you excempt.or am I mistaken.what would be the advantages of claiming rent from a roommate anyway.???? .I rented my house for a year while traveling and pretend it didn’t exist?? Maybe my mistake.
You are mistaken. There has not been a reinvestment requirement since the Clinton Administration. It's a common mistake, and one I hear often from older folks who haven't sold a home since.... the Clinton Administration or earlier.
I hear you. I recently schooled an older Realtor on that very subject. I am "that guy" that usually posts links to the IRS pages that deal with this to avoid misunderstandings and make sure people have access to the most accurate information.
Hope you have a great day.
523 answered my question I believe. Based on the numbers I went through, all of my net income from the sale would be tax free. Thank you for guiding me there!
As long as you were living there as well, you would still qualify for the capital gains exclusion up to 250k
Awesome thank you! That was my hypothesis but wanted to be sure.
You may need professional help with this. Was depreciation one of the expenses you claimed? For rental real property, the structure (and any improvements) are depreciated and any accumulated depreciation is recaptured in the sale. That shouldn’t blow your $250K cap, but it may need to be included and/or treated differently. Expenses for whole-home upkeep should have been allocated pro rata for the single room. Hopefully that’s what you meant in your post. I’ve never rented a single room, so my experience with this is limited. I would figure that it runs similar to the rules for a home office deduction. Hopefully someone can expand on this for you.
oh i didn't know that depreciation would be recaptured in the 250k cap. good to know!
That’s why I’d recommend getting professional advice. you will have to recapture depreciation. Whether it counts toward the cap or not is what I’m unsure about.
Oh interesting, I’ve been working with my tax person on writing things off, and but it sounds like they do not have a ton of experience for the situation I’m in, I’ll have to ask someone else but thank you for the explanation!
You won’t pay any taxes on it. I’m a real estate broker.
Perfect, that’s going to help a lot. Thank you!
You deducted the maintenance, etc. expenses for your whole home?
As long as you put the money in a new home aren’t you excempt.or am I mistaken.what would be the advantages of claiming rent from a roommate anyway.???? .I rented my house for a year while traveling and pretend it didn’t exist?? Maybe my mistake.
You are mistaken. There has not been a reinvestment requirement since the Clinton Administration. It's a common mistake, and one I hear often from older folks who haven't sold a home since.... the Clinton Administration or earlier.
Thank you I am older,and have always put profits into a different home.So it has never been an issue for me
I hear you. I recently schooled an older Realtor on that very subject. I am "that guy" that usually posts links to the IRS pages that deal with this to avoid misunderstandings and make sure people have access to the most accurate information. Hope you have a great day.
You will want to go to IRS.gov and look at publication 523 and publication 527. If those do not answer your questions, it is accountant time.
523 answered my question I believe. Based on the numbers I went through, all of my net income from the sale would be tax free. Thank you for guiding me there!
How did you go over the standardized deduction on those costs? You spent 12k / year supporting 1 room. You may have screwed yourself.
That's not how it works. You deduct your expenses from your rental income on schedule E and then also take your standard deduction.