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selling rental property

DWoods
Level 1

My brain isn't working well--

if you bought a rental property for $150,000, and a few years later sell it for $300,000

(not adding/subtracting costs and basis here), you have a profit of $150,000.

However, you still had a loan of $90,000.  Do you subtract the amount of the loan from the profit  to get to the net profit you pay taxes on?

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abctax55
Level 15

Did you report that original loan as income when you got it?   Most likely not, so paying it back isn't a *deduction*.

Former Chump..umm... AllStar...This message was typed from 6 feet away so you can safely read it immediately.

If a post answers your question, click on *Accept as solution* for future searches

View solution in original post

3 Replies 3
sjrcpa
Level 15

No.

 

 


ex-AllStar
abctax55
Level 15

Did you report that original loan as income when you got it?   Most likely not, so paying it back isn't a *deduction*.

Former Chump..umm... AllStar...This message was typed from 6 feet away so you can safely read it immediately.

If a post answers your question, click on *Accept as solution* for future searches

View solution in original post

DWoods
Level 1

Thanks.  Got it figured out and realized the answer was right in front of us.  My brain hurts!