Do I have to pay taxes on the sale of a house I lived in for 5 years and rented for the last 2.?

tax help: Do I have to pay taxes on the sale of a house I lived in for 5 years and rented for the last 2.?
This was our first house and lived in it for 5 staight years. We bought a second house and rented our first house to some family members. They lived their for 2 years and payed us rent. We claimed it on our taxes as rental and are now wanting to know if we will have to pay capital gains taxes next year on the money we made on the sale of the house? If so what is the percentage?

Answers and Views:

Answer by Christine in FL
yes but you don’t have to pay captial gains when you sell it, if you sell it now!

Answer by THEM
yup, you sure do.

Answer by [email protected]
yes 12%

Answer by tbird00719
you definately have to pay taxes, you will have to speak with a judge to find out how much.

Answer by Cavalia
What don’t you have to pay taxes on?

Answer by suttlegn123
You shouldn’t have to. The law is if you lived in it for 2 years or more you don’t have to pay capitol gains tax. The 2 years don’t even have to be consecutive. We paid capitol gains on a house we just sold this past year it was about 10-11%. We only lived in the house 1 year and some odd months. Ouch. Go to irs.com

Answer by bambinno4
yes , uncle sam wants your money ………..no excuse

Answer by mastorman
Next time add the tax’s to the rent fees and pay 1/4-ly. That way at the end of the year you owe nothing.

Answer by piratedoll
Did you claim depreciation on the house while it was producing rental income?

First there’s recapture: over the years, you have been deducting depreciation. Now, its “payback” time – also called a “recapture tax”. Current tax law will require you to pay a 25 percent tax on the amount you have depreciated.

Second there’s capital gain: since you have held the property for more than one year, you are eligible for the capital gains tax rate, which currently is 20 percent of the appreciation.

There are things you can deduct from the selling price in order to arrive at the adjusted basis or taxable amount. I think you would be well advised to consult with a tax professional before the end of the year (or before you actually sell).

Answer by E.P.
You have to pay taxes on gains over 250K for an individual or 500K in your case. In calculation of the gains you can also deduct all the improvements you made.

You do not have to pay any taxes if you lived in the house for over two out of five years prior to it’s sale and your gains are less then stated above. So, sell now, and good luck.