tax liability?

[cjpj47@cs.com]

Hi- Massachusetts: Bought house in 4/85 for 123,000. 2 family so I arbitrarily assigned 20,000( 1/6 ) to the rental house in back. Yearly at tax time I assigned 1/6 of taxes & interest and insurance to the rental, and took deductions and depreciation as ACRS 19 year property. Now, in 2000 or 2001 shortly I will be selling this property for in excess of 300,000. I realize that the cap gains are covered by my wife and I using the 500,000 once every 2 year allowance. But my question concerns the depreciation of the rental, and how much the tax people will expect, and my tax liability? Any help from a lawyer? Thanks C

 

[HomeGuru]

Pursuant to the Eternal Revenue Code Section 1040, your tax liabilty would be based on the sales price less your cost basis. In other words, whatever your net profit is that's the amount that you owe the tax people.

Repost on the tax board for a second opinion.