When selling a home, If recap tax is considered income tax, then there may not be tax advantages. Because the recap would be 300K and you will be taxed at a much higher rate. Is my understanding correct?
question about recap tax when selling homes
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depreciation recapture is taxed at 25%, not regular income rate
-njrookie-
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03/31/2015 postreply
08:49:46
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oh,Someone said income rate couple days ago.Thanks
-meowi-
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03/31/2015 postreply
09:09:04
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your best friend is google
-njrookie-
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03/31/2015 postreply
09:22:27
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Google it and found that for 100k gain you
-meowi-
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03/31/2015 postreply
10:16:53
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have you tried to google 1031 exchange?
-海泠-
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03/31/2015 postreply
10:23:26
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yes, but I don't want to buy another one.
-meowi-
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03/31/2015 postreply
10:55:10
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cap gain and depreciation recapture are mutually exclusive
-njrookie-
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03/31/2015 postreply
10:28:59
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Yes. You take the 25% for the recap total (not the 20%)
-jjj7-
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03/31/2015 postreply
10:34:21
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That is what I don't understand, it seems taxed twice from this
-meowi-
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03/31/2015 postreply
10:42:31
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from this case, the calculation
-meowi-
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03/31/2015 postreply
10:53:34
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remember for the recapped depreciation, ...
-njrookie-
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03/31/2015 postreply
11:08:31
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thank you njrookie, please one more question below
-meowi-
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03/31/2015 postreply
11:42:55
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I find another case, it was done another way
-meowi-
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03/31/2015 postreply
11:52:19
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I think your second computation correct
-njrookie-
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03/31/2015 postreply
11:53:25