Real Estate Law

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My husband and I purchased a home with our son and are on…

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My husband and I...

My husband and I purchased a home with our son and are on the title. He moved out of the home and we kept it as a rental property waiting for the value to increase because it dropped after the 2008 crash. We are thinking about selling the house because it is now worth what we paid. Is there a capital gain? I was told that when my son vacated the property when the market was down, that became my base and now that it is up in value I will have to pay a gain, is that true?

Lawyer's Assistant: Because real estate law varies from place to place, can you tell me what state this is in?

I reside in California, the home my son lived in is located in Nevada.

Lawyer's Assistant: Has anything been filed or reported?

After he vacated the property, I rented it out to protect our credit and didn't allow our son to short sale the property. We claimed it as a rental property for those years and took a loss each year.

Submitted: 11 months ago.Category: Real Estate Law
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9/26/2017
Real Estate Lawyer: Ray, Lawyer replied 11 months ago
Ray, Lawyer
Category: Real Estate Law
Satisfied Customers: 49,596
Experience: Texas Attorney for 30 years dealing in real estate
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Real Estate Lawyer: Ray, Lawyer replied 11 months ago

Here is reference on how to calculate this.

Calculating the gain or loss on a sale of rental property is a very simple calculation, and understanding it will result in you saving thousands of dollars in taxes.

Be sure to account for selling costs and improvements to reduce your gain.

Many investors forget to do that.

1. First, determine your selling costs. There is a great tip about accounting for all selling costs and you can read it here:

Assuming you sold a property for \$200K and you paid 6% commission (\$12K) plus other closing costs that added to \$6K, your selling costs are

\$18K (Selling Costs) = \$12K (Commission) + \$6K (Closing costs)

2. Second, you calculate the adjusted cost basis of your property. A simple formula for calculating adjusted cost basis is
Adjusted Cost Basis = Purchase price “ Depreciation + Improvements

Assuming that you had bought the property for \$95K and paid closing costs of \$5K that you added to increase the basis, your purchase price is \$100K.

This should tell you whether there is any gain or not.Thanks again.

If you can positive rate 5 stars it is much appreciated.

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