USA Rental home sale- taxable income to report

[wallacem_1]

Hello all, hoping someone can assist with some general questions regarding taxable amounts related to the sale of a rental property. It was in service from 2013-2020, long term. This is the only rental property we owned.

The full purchase price was $137,932, the total depreciation amount over the 7 years is $40,482- so adjusted costs basis should be $97,450. As a side note, TaxAct (my tax software) never prompted to separate the building and land values, so I have been depreciating the entire cost for 7 years. Not sure if that is an issue or if/how I need to address that now !

The full sale price was $195,017 with the following reductions-
$361.57 - county tax prorated
$300.00 - title/deed release work (closing atty)
$280.00 - title settlement fee
$7875 - realtor commissions
$1404.50 - county excise tax
$107,851.62 - mortgage & equity line payoff
$53.00 - termite inspection
----
76,891.31 - Net to Seller

My question is really, what is my taxable income here as I'm not certain which of the above reductions I can use to reduce the profit? I'm grateful for any guidance provided, thank you!

 

[kirby]

Time to read up on "Depreciation Recapture." But better than that is
for you is to have a tax pro guide you through this.

 

[TaxDevil]

Use form 3115 to correct the wrong depreciation.

 

[BIG E]

As the TV commercial said years ago "Ask the box"