Capital Gains and Losses

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I have owned a rental condo for over 20 years. I have

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I have owned a...

I have owned a rental condo for over 20 years. I have reported losses each year of ownership and my accountant has reported those losses each year at filing. When I sell my condo, my losses will exceed my capital gains on the property. Will that eliminate my capital gains tax burden?

Accountant's Assistant: What are the assets or property for this capital gain?

Purchased for 125K and will sell for 250K. My losses exceed the amount of gain.

Submitted: 2 months ago.Category: Capital Gains and Losses
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5/31/2018
Tax Expert: Carter McBride, Professor replied 2 months ago
Carter McBride
Carter McBride, Professor
Category: Capital Gains and Losses
Satisfied Customers: 1,311
Experience: Adjunct Professor
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Hey! I'm Carter, I'm a CPA and can help you out.

If you previously deducted these losses, then they cannot offset any income.

If these losses could not be deducted in the past, then when you dispose of the property, you will get to use those losses. These losses will only offset ordinary income, such as wages. They cannot offset capital gains.

When you sell the property, you will have capital gains from the sale and then you could have ordinary income from depreciation recapture. That income can be offset by any previous losses you could not deduct in the past.

Let me know if you need anything else. If not, please leave a rating. Thanks!

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Tax Expert: Carter McBride, Professor replied 2 months ago

Hey! I just wanted to check in and see if you needed anything else. If not, please leave a rating so I can get credit for helping you out. Thanks!

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