Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
don't know if it's a federal thing, or just the state of Virginia. I was told that if you sell a property (condo), but have rented it out for more than 2 years, it's now considered a business of sorts. This now means you need to pay additional taxes on it when you sell it? Any details on this?
Are you talking about capital gains? It applies in some cases. I believe in order avoid the cap gains you must live in the house for two out of the last 5 years of ownership.
So live in 2 years rent for 3 years and sell ok no cap gains up to 250k single 500k married
Live in it 2 years rent for 4 years and sell cap gains tax applies.
the property has to have been your primary for those 2 years. it is a rolling 5 year period so you have to becareful. hope you took depreciation on it as whether you actually took it or not you will be required to pay it back as well.
folks don't take the depreciation for years and then get stuck paying back something they never bothered to take.
the property has to have been your primary for those 2 years. it is a rolling 5 year period so you have to becareful. hope you took depreciation on it as whether you actually took it or not you will be required to pay it back as well.
folks don't take the depreciation for years and then get stuck paying back something they never bothered to take.
Quote:
Originally Posted by jackmichigan
^^^^This may be one of your biggest concerns.
In addition to the fact that you haven't claimed the rental income on your tax returns for the past two years, right? You need a CPA. BADLY.
don't know if it's a federal thing, or just the state of Virginia. I was told that if you sell a property (condo), but have rented it out for more than 2 years, it's now considered a business of sorts. This now means you need to pay additional taxes on it when you sell it? Any details on this?
It's considered a rental property. There are many rules that apply to rental properties. You need to talk to a CPA and make sure you aren't totally screwing your taxes up.
In addition to the fact that you haven't claimed the rental income on your tax returns for the past two years, right? You need a CPA. BADLY.
This is the first tax year I've collected rental income. As such, it will be the first time it will get indicated on my W2. My tax professional, is using their method to figure out what the depreciation will come out to be.
So you need to show you've lived in that dwelling for 2 years per every 5 year time period.
Next question would be what the differences in tax payments be if i sold the property before it gets classified as business use vs after so. For the former, you need to report and pay taxes like with any other income or payments received. What extra is there if it were the latter case?
Last edited by ackmondual; 04-01-2015 at 10:19 AM..
This is the first tax year I've collected rental income. As such, it will be the first time it will get indicated on my W2. My tax professional, is using their method to figure out what the depreciation will come out to be.
So you need to show you've lived in that dwelling for 2 years per every 5 year time period.
Next question would be what the differences in tax payments be if i sold the property before it gets classified as business use vs after so. For the former, you need to report and pay taxes like with any other income or payments received. What extra is there if it were the latter case?
All great questions that only your CPA can properly answer after looking at the numbers.
This is the first tax year I've collected rental income. As such, it will be the first time it will get indicated on my W2. My tax professional, is using their method to figure out what the depreciation will come out to be.
So you need to show you've lived in that dwelling for 2 years per every 5 year time period.
Next question would be what the differences in tax payments be if i sold the property before it gets classified as business use vs after so. For the former, you need to report and pay taxes like with any other income or payments received. What extra is there if it were the latter case?
It gets classified as a rental property the day you sign a lease and rent it out. From that day you have to treat it like a rental property and report the rental income. The 2/5 year rule applies to capital gains tax exemption upon sale. It's impossible for anyone to tell you what your capital gains tax would be because we don't know your basis in the property nor a theoretical sale price. We can't even tell you what your capital gains tax rate would be because we don't know your AGI.
This is the first tax year I've collected rental income. As such, it will be the first time it will get indicated on my W2.
A W2 is for your salary. It doesn't have anything to do with rental income.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
