Hello,
For the last 20 years we rented the first floor of our two story primary residence as a seperate rental apartnment. The accountsnt used half of the utilities, taxes, insurance, and other expenses as deductions against the rental income. He also took some depreciation every year. In March of 2013 my wife and I divorced, she stayed in the house I moved out, we maintained the first floor as a rental. I retained 50% ownership in the property.
In May of 2014 we sold the property. The appraised value when we started renting was $186,000, half was used as the value of the rental. We sold for $330,000.
How should the gains be treated and how much of the depreciation if any needs to be recaptured?
Thank you
John

then there is no long term capital gain tax forobthof you;if you and spouse owned it jointly but file MFS or separated return, then, each of you can exclude $250k of gasin from the sale of th ehome aslongas you sell it Aftwer may 6 1997.in your case the gain is too low so no tax liaiblity on the realized long term capital gain. however, yu need to recapture the unrecaptured sec 1250 depreciaiton as your ordianry incoem taxed at 25% aslongas yur marginal tax rate is 25% or higher; however, if your tax bracket is 15% the its rate'd be 15% , 10% then it'd be also 10%.