T1: depreciation tax rate, T2: capital gain tax. i buy a house 400K, NBV 300K, accum depreciation 100K, now I sell 500K(after sell expense), what’s my recapture dep? is it 100*T1+(500-300)*T2? if I sell at 350K, what’s my total tax? is it (350-300)*T1 if I sell at 250K, no total tax?
recapture tax should be t1 X 100k, Since the value of the property actually increased all of the accumulated depreciation needs to be taxed. capital gains tax is t2 x 100k gains will be 500k - mortgage balance, - tax on capital gains and depreciation. If you sell it for a loss you get a tax credit