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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29574
Experience:  Taxes, Immigration, Labor Relations
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Residential rental property was sold and there was a

Customer Question

residential rental property was sold and there was a mortgage on it so where do I put in the mortgage on my taxes to show what I really gained or lost on the property
JA: Thanks. Can you give me any more details about your issue?
Customer: I sold a rental property foe 147,000 I have a basis of $117000 and mortgage of 121000 how do I show that I only received 12468 for the property after paying off the mortgage
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Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

When the loan/mortgage was taken - it was not reported as your taxable income - correct?
So when that mortgage is paid off - that amount is NOT deducted.

Expert:  Lev replied 1 year ago.

The sale of rental property is reported on form 4797
The gain is calculated as (selling price) MINIS (adjusted basis) MINUS (selling expenses)
That gain will be added to other taxable income - but if you owned that rental property more than a year - the gain will be taxed as long term capital gain at reduced tax rates.

We still may deduct mortgage interest - that amount is reported on schedule E with other rental expenses.


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