Selling Rental Condo

[nancyschmancy]

Hello everyone,

I am a Canadian born US Citizen, living in Canada now since '00 and have been having an online company do my US taxes for the past several years. I have questions in regards to selling a rental condo but am finding it difficult to work with my current tax company as they only communicate online. I've been googling my life away on this subject and hoping to find helpful advice here.

I have been leasing out a condo that my husband and I both own (he is not a US citizen and I file Married Filing Separate) since 2014. Our tenants moved out August 31st and we would like to sell it now and am seeking advice on how to sell it in a way that avoids paying the highest amount of taxes on the capital gains.

We bought the condo in 2010 for $250,000 CDN, lived in it until 2014 and selling it now would probably get us approximately $450,000 CDN. I did some research on the subject and if I understand correctly, the capital gains would be about $200,00 CDN and then split 50% with my spouse, leaving me with a capital gain of $100,000 CDN. I would then have to pay at least 24% taxes on those gains?

My question is would it be more beneficial if I were to gift the property to my spouse and pay the taxes on gifting property instead? I understand there is a certain real estate amount you can gift to family and was wondering if that is possible in my case. Does anyone here have similar circumstances or knowledge on this matter? Any advice would be amazing!

[nelsona]

Your Cdn tax on they condo will not be as high as you think, because you benefit from the years it was your principal residence (plus 1 year), so your gains will only be about $90K between you. 45K would be your portion, and only $22K wouyld be your taxable portion.

Your gains in US will be based on the cost in USD when you bought and the proceeds in USD when you sold. You would report your 1/2 to IRS plus recaptured depreciation.