Expert: liznarr - 8/17/2007

Question
We sold our condo that we were renting for the past 15 years. I beleive we have
to pay taxes on the depreciation of it which is 66,000.  This is in Connectict.
How much and when would we have to pay the taxes

Answer
Hi Scott,

It is my understanding that depreciation claimed on investment and/or rental property DOES have to be added back to your adjusted basis at the time of sale.  Your adjusted basis is then deducted from your sales price, less any costs to sell; and the difference (if a profit) is the amount you would owe tax on.  

I would think that any tax due on any profit you made from the sale of your condo would be due on your return for the tax year in which the sale occurred, unless you owner-financed -- in which case you would pay a pro-rata share of the tax owed on profit for the portion of income you receive each tax year.  You should, however, verify this -- and all my comments -- with a tax professional.

As far as how much tax you would have to pay, you would need to consult with a tax professional or a Certified Public Accountant as I am not qualified to give accounting or tax advice.

Good luck to you.

Regards,
Elizabeth Narr