In this one-minute moment, Dr. Friday delves into the complexities of reporting the sale of a second home on your taxes. Was it ever rented out? Was it a VRBO? The answers can significantly impact how you report the sale. Tune in to understand the difference between long-term or short-term capital gains, the recapture of depreciation, and more. For further queries, Dr. Friday is here to help.
G’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.
Question that came in asked how do I report the sale of a second home? And this is a little bit tricky because was that second home ever rented out? Was it a VRBO? If none of that applied, it was truly just a second home, then this is truly just long-term or short-term capital gains reported on a Schedule D. But if it was a rental at some point, remember we have recapture of depreciation which is taxed at ordinary income rates, then the actual gain between the sale price and the original purchase price and all the other assets tied to it would be capital gains, either long-term or short-term. If you’ve got questions go to drfriday.com.
You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.