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Tina
Tina, Lawyer
Category: Real Estate Law
Satisfied Customers: 5436
Experience:  17 years of legal experience including real estate law.
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We own two investment properties in Central TX. In May 2016,

Customer Question

We own two investment properties in Central TX. In May 2016, we retired and moved back to TX after being gone since from the state since 2004. In Sep 1999, we rented out our Harker Hts, TX (could not sell it as there was a glutton of new housing on the market) to a different home in Belton, TX which served as our primary residence. We put the Belton property into service as a rental in Oct 2004 due to working overseas for the US government. We want to sell both houses in Feb/Mar 2017 once they are vacant, but we are concerned about the tax impact event though we are retired with our principal residence in San Antonio, TX (as of May 2016). We need to know what the rules are-- concerned about rules on capital gains or whether we have to pay back depreciation on both houses.
JA: I'm not sure of the exact price, but there's only a $5 deposit. The rest of the price information will be on the page I send you to.
Customer: What is the $5.00 deposit for? Thought I'd have to make an appointment with the attorney.
JA: Because real estate law varies from place to place, can you tell me what state this is in?
Customer: Texas
JA: Has any paperwork been filed?
Customer: What kind of paperwork? We are only in the consultation phase at this point.
JA: Anything else you want the lawyer to know before I connect you?
Customer: Is Is
Submitted: 4 months ago.
Category: Real Estate Law
Expert:  Barrister replied 4 months ago.

Hello and welcome! My name is ***** ***** I am a licensed attorney who will try my very best to help with your situation or get you to someone who can. There may be a slight delay in my responses as I research statutes or ordinances and type out an answer or reply, but rest assured, I am working on your question.

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Did you begin depreciating the properties each year from the time that you started using them as a rental?

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And both of these are rentals, neither is your home, correct?

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What will your income tax bracket be in 2017?

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thanks

Barrister

Customer: replied 4 months ago.
The house in Harker Hts, TX was put into service as a rental in Sep 1999, and then we moved into the house in Belton, TX as our principal residence. We put the Belton property into service as a rental in Oct 2004 and went overseas. We came back to the states in 2008 and purchased a home in VA as our principal residence. We sold that property in Dec 2013 and decided to rent in VA until we returned to TX. We purchased a home in San Antonio for about $300K in May 2016. Husband retired in Jan 2016 and I retired in Apr 2016. Husband received his 1st retirement annuity in the month of Feb 2016, and I began to receive retirement annuity and Social Security in May 2016. Husband will be 65 in Dec 2016 and I turned 66 in Apr 2016. Would estimate gross income for the year to be around $160K or less.
Customer: replied 4 months ago.
Income bracket for 2017 will be around an estimated $120K
Expert:  Barrister replied 4 months ago.

Ok, so did you actually depreciate the rentals on your taxes so as to be able to deduct that from any income that they generated?

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Income tax brackets range from 10% all the way up to 39.6%... So you would typically be in a certain bracket.... maybe 25% if you didn't have other deductions to reduce your applicable taxable income.

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Do you know if you are in the 25% bracket or another one?

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thanks

Barrister