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Original land-----$56,000---- Built home $102000.----built poultry houses $500,000.00(depreciated)----- anticipated sell price $850,000. lived in home 16 years What might a good estimate of the capital gains taxes?
Hello again elder, Your total basis would be $158,000 ($56M plus $102M plus $500M minus $500M depreciation) Your gain is the selling price of $850M less your basis of $158M, or a total gain of $692M. Of that $692M gain, $500M is attributable to depreciation recapture and is subject to a special federal tax rate of 25%. The remaining gain of $192M is your regular capital gain, from which you may exclude $500M for using this as your primary residence, so there is no tax on that portion of the gain. No part of your allowed $500M exclusion may be used against the depreciation recapture. Your $500M depreciation recapture results in federal tax of $125,000 and Georgia state tax of $30,000. If this was helpful please press the Accept button. Thank you elder.
Accountant
25+ years tax consulting. Specializing in returns for US citizens living abroad