A.D. CANTELMO REALTY/TONY CANTELMO
BROKER
TONY CANTELMO

A.D. Cantelmo Property Management
Our Business is Property Management Orange County California


Selling your Rental Property

You have owned your rental property for a while and you have made a little money, but you feel like it’s time to sell and cash in on the Equity that your home has accumulated through the years. You contact a Real Estate Agent to find out how much your home is worth and also how much it will cost you in commissions and other selling costs. Now you have all the numbers you need to make your decision, or do you?

Not quite!  Selling your rental property is not the same as selling your personal property. Most people know that when you sell your personal property, you get a tax break on the profit. You get $500,000 exemption when you are married and $250,000 when you are single. That means that if you profit within these numbers, you pay no taxes on that profit. If you go over those numbers, then you will be taxed on the amount over the exemption and since I am not an accountant, I will leave the tax rate that you would pay to your accountant.

Say it ain't so

So now, let’s get back to our rental property owner who wants to sell their rental property. Ok, you know approximately what your house is worth and you know what the commissions are going to cost you and the other selling cost’s, so you can now figure out how much you are going to put in your pocket once you sell the property.

HOLD ON, YOU FORGOT SOMETHING!

That’s right, you forgot a tiny little thing called taxes. Remember, you do not get the exemption as you would if you sell your personal property, when you sell your rental property. Your must pay “Long Term Capital Gains”. (Long term Capital Gains tax is a tax applied to assets held for more then 1 year. The amount will depend on your total taxable income. The rates are 0, 15%, or 20%. And you may also have state taxes depending on where you live.
Ok, now you know everything, right? Not quite, because over the years you have owned the property, you deduct depreciation for that property every year. The depreciation is for the building, not the land. I’m not going to get into the numbers of depreciation, again, I will leave that for your accountant, but none the less, since you have taken the depreciation for the property, and the property has probably gained in value, not depreciated, the government would like some of that money back. That’s called recapture. If you have owned the property for a long time, this amount can be substantial. And again depending on the state you live in, you may also owe your state depreciation recapture.

So when you sell your rental property, the taxes you will be paying are, Federal Capital Gains, Depreciation recapture and depending on your state, you could have state Capital gains and state depreciation recapture.
The best thing to do, if you are thinking of selling your rental property, talk to you accounting professional and find out what the taxes are going to be. Then you can decide what you need to do. You may want to do a 1031 exchange, but that’s another conversation.

If you have any questions, you can contact me any time
Tony Cantelmo
714-313-7413


A.D. Cantelmo Property Management
Specializes in Property Management Orange County Ca.

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What my clients are saying  

5 reviews 5.0 star rating 1/21/2016 I was tired of using a large management team to manage my investment property. I felt I was always on the back burner. I was recommended to Tony from a business associate, he assured me I would be very pleased. Well that was an understatement, Tony is amazing. He's above all honest and always available for my concerns. I'm not as well versed as other investors with property management and maintenance and tenant relations, Tony has been an excellent partner and has guided me through quite a bit of needed repairs and worked far beyond what was expected to help turn my little investment into quite a prosperous investment, If what your looking for is prompt return calls, honest direction and someone very knowledgeable with general contractors and real estate laws, Tony is your man. Angela

 

~ Angela

5 reviews 5.0 star rating 1/21/2016 I was tired of using a large management team to manage my investment property. I felt I was always on the back burner. I was recommended to Tony from a business associate, he assured me I would be very pleased. Well that was an understatement, Tony is amazing. He's above all honest and always available for my concerns. I'm not as well versed as other investors with property management and maintenance and tenant relations, Tony has been an excellent partner and has guided me through quite a bit of needed repairs and worked far beyond what was expected to help turn my little investment into quite a prosperous investment, If what your looking for is prompt return calls, honest direction and someone very knowledgeable with general contractors and real estate laws, Tony is your man. Angela

 

~ Angela

"10 out of 10 I am so Happy Since I left my old company and I joined AD Cantelmo Property Co I am stress free I live in a different state and this company watches my house and always Mr Tony Cantelmo is on top of things I really want to thank you for what you do for me and I would really Recomend this Company to any and every one Thank You again. Shawn" ------------------- "I need to trust the people I work with and I trust Tony. He stays on tops of things, communicates well, and gets things done. He not only gets things done but he gets things done the right way. Jim"

 

~ Shawn

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