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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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I have a two- part question: I live in california, if that

Customer Question

Hello, i have a two- part question:
I live in california, if that matters.
1. I bought a home in 2011 for $200k with a down pymnt of &$50k. We paid down the principle alot over four years. So we only owed about $115k when we sold it. We sold it for $200k in 2015 ( to a family member). So we got our $50k back plus another $35k. How will this be taxed? I think i should only pay taxes on $35k. Or do i pay taxes on $85k? If that is the case then i will actually lose money.
Question 2: if i bought the home in 2011 for $200k with $50 down AND we bought it as a rental, how much could i depreciate my rental each year?
Submitted: 9 months ago.
Category: Tax
Expert:  emc011075 replied 9 months ago.

Hi. My name is ***** ***** I will be happy to help you.

If you bought the house for 200K and sold it for 200K you do not have any capital gains. You would actually have a capital loss because of closing costs, and I am not even assuming improvements.

If you bought the house as a rental property, the story would be slightly different. You may have had little capital losses, depending on depreciation you have had taken.

By the way, your downpayment or your financing is completely ignored when calculating capital gains/losses.