What are my tax liabilities for selling my vacation home?

November 29, 2004

Date:  Sat, 23 Oct 2004
From:  Dino

I have a four-bedroom home that I bought in 1997 in Las Vegas, Nevada. It was a rental property from the time of purchase until September, 2003. Since then it has been a vacation home for my personal use.

I have been thinking about selling the property and buying a smaller home/condo and taking the excess equity from there and remodeling my home here in California.

What are my tax liabilities on this type of transaction? If you have any suggestions, let me know. (I am a California resident.)


Date:  Wed, 24 Nov

Hello Dino,

You haven't provided enough information for me to give you a detailed answer. If you sell the home outright, the gain will be subject to California tax at rates up to 9.3% and federal tax at a 25% maximum rate on gain up to the amount of accumulated depreciation plus 15% for any additional gain. As an alternative, consider exchanging the property. You can limit your gain to the cash that you receive plus any reduction in your debt.

Good luck!
Mike Gray

We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.

Michael Gray, CPA
2482 Wooding Ct.
San Jose, CA 95128
(408) 918-3162
FAX: (408) 938-0610
Hours: 8am - 5pm PDT Monday - Friday

Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Connect on Google+
Our Blog
© 2018

Subscribe to
Michael Gray, CPA's
Real Estate Tax Letter!

We respect your email privacy

We respect your email privacy!