I have the following tax-related question to the gurus out here. Situation is as follows: 1/2 of duplex is used as a primary residence, 1/2 is rented to a tenant. If the duplex is sold (estimated sales value $220k), what will the taxes be on this sale? The duplex was purchased about 7 years ago and will be sold as a part of divorce settlement, if that matters. Thank you!
Have you lived in and owned half for over two years?
What was the purchase price?
How much depreciation was taken or allowed on the rental half?
What is your other income?
Seth
If the half of the duplex you lived in was your primary residence for no less than 2 of the last 5 years before sale, any gain up to 250,000 if single/500,000 if married filing joinly in the year of sale. The other half, assuming the cost minus depreciation on a straight line basis is less than proceeds on the rented half (ie, you prorate the sale based on a reasonable formula) is a passive income capital gain which helps use up any PAL carryforwards. Mike
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