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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29573
Experience:  Taxes, Immigration, Labor Relations
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My wife and I want to sell our former home, a duplex, that

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My wife and I want to sell our former home, a duplex, that we had depreciated by 50% when we were an occupant of half the dwelling. Now we occupy none of the building and assume that a sale now would be 100% profit minus a small depreciation expense available. I had heard that an installment sale might be a better tax advantaged than a straignt sale. Do you have any confirmation or advise available to us?

Hi and welcome to Just Answer!

You need to report the sale as two separate parts - the rental part and the personal part. Depreciation of the rental part will be recaptured and taxed not more than 25% - the rest of the gain will be taxed not more than 15% as long term capital gain.

The capital gain on the personal part will be taxed not more than 15%.


An installment sale is a sale of property at a gain where at least one payment is to be received after the tax year in which the sale occurs. You are required to report the sale on the installment method unless you "elect out" in the year of the sale. If you elect out, you report all the gain as income in the year of the sale.


Under the installment method, you include in income each year only part of the gain you receive, or are considered to have received. Use Form 6252 Installment Sale Income, to report installment income each year. You will need to file Form 1040 and may need to attach Form 4797 and Form 1040, Schedule D .

I also suggest you to read the IRS Publication 537 Installment Sales -

Let me know if you need any help or clarification.


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