What are the tax implications of selling my rental property?

What are the tax implications of selling my rental property?

When you sell a rental property, you may be subject to capital gains tax on the profit. This includes any appreciation in value since you purchased it.

Are there any deductions I can take to reduce my taxable income?

Yes, you can deduct expenses related to the property, such as repairs, maintenance, and depreciation, which can lower your taxable gain.

What if I reinvest the money into another property?

If you reinvest the proceeds into another rental property, you might qualify for a 1031 exchange, which can defer capital gains taxes.

How do I calculate my capital gains?

To calculate capital gains, subtract your property's adjusted basis (purchase price plus improvements minus depreciation) from the selling price.

Are there any state taxes I should be aware of?

Yes, some states impose their own capital gains taxes, so it's important to check your state's tax laws regarding property sales.