Tax Issues- Selling Rental Property
have several properties but would like to start selling . How are taxes affected by length of ownership, depreciation and gain. example one house bought in1988 for 28000 now appraises for 70000. property in okla. thx duggone
On the assumption you are referring to investment property and not your personal residence:
How are taxes affected by length of ownership, depreciation and gain
The capital gain tax rate for property held one year or less is the same as your ordinary income tax rate. For property held more than one year, the maximum capital gain tax rate is 15%.
For depreciable property, any depreciation allowed since 1997 (whether taken or not) is recaptured at a 25% rate. Depreciation does reduce your cost basis and does increase your taxable profit. See DaveT's article on this site titled "How Depreciation Is Recaptured" for a more detailed discussion on depreciation and its impact on your tax picture.
You only have no gain if you sell the property for your adjusted cost basis or less. All gain is taxable income. The tax rate is determined by the length of your holding period.