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Old 05-17-2015, 01:23 PM
 
106,242 posts, read 108,237,907 times
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ooops , i was replying to a similar thread . didn't realize we now have 2 .



//www.city-data.com/forum/real-...d-parents.html
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Old 05-17-2015, 01:41 PM
 
Location: San Diego, CA
1,389 posts, read 1,160,140 times
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Did they (your parents) live in the house for two of the last five years?
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Old 05-17-2015, 09:16 PM
 
4,833 posts, read 5,708,450 times
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Quote:
Originally Posted by GuyInSD View Post
Did they (your parents) live in the house for two of the last five years?
No.
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Old 05-18-2015, 03:14 AM
 
Location: Florida
23,164 posts, read 26,118,923 times
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Do you declare them as dependents?
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Old 05-18-2015, 06:20 AM
 
Location: Southern California
4,453 posts, read 6,781,765 times
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Quote:
Originally Posted by thelopez2 View Post
Depending on many years they lived there, and how many years a "few" is, they might now have to pay any taxes.
I meant not have to pay any capital gains taxes. Even if they didn't claim the depreciation, expect to pay it back.
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Old 05-18-2015, 07:11 AM
 
Location: Indianapolis
505 posts, read 938,159 times
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Working or not is really not going to affect the calculation of tax on the sale of the house. If he wants to work, he should work. Don't overthink it.
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Old 05-18-2015, 07:46 AM
 
Location: Raleigh, NC
19,399 posts, read 27,703,839 times
Reputation: 36050
Quote:
Originally Posted by UsernameAlreadyTaken View Post
Working or not is really not going to affect the calculation of tax on the sale of the house. If he wants to work, he should work. Don't overthink it.
Smartest comment of the day. Maybe the smartest comment I'll read all Week. BRAVO!!!!
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Old 05-18-2015, 07:52 AM
 
4,833 posts, read 5,708,450 times
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Unless I'm mistaken, income plays a part as to how much they will get taxed on capital gains and depreciation on sale of rental property. Varying degrees from zero income to 20K to 50K, etc
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Old 05-18-2015, 10:58 AM
 
Location: Chicago area
18,762 posts, read 11,755,546 times
Reputation: 64149
Time to visit a good accountant.
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Old 05-18-2015, 11:20 AM
 
4,833 posts, read 5,708,450 times
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Quote:
Originally Posted by animalcrazy View Post
Time to visit a good accountant.
I plan to but just wanted to get some responses from this board first since they don't plan to sell yet.

My basic question. They purchased home for 75K. Sell at 100K. House is paid off. They will profit 100K but taxable income is sell price minus price when purchased. So net difference is $25K (we'll leave out all the other fees etc for simplicity sake)

Capital gains and payback of depreciation from rental property is based off of personal income.

But how far back does the IRS valuate that income. Is it from just the present year or do they go back a certain number of years to valuate income

Example of parent income:

2012: $7000
2013: $7000
2014: $7000
2015: $24000
2016: $7000

In this scenario, would it be wiser to sell in 2016 (when they have $7000 income) vs in 2015 (when they have $24000 income)?

Thanks
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