How Much Tax Will You Pay If You Sell Your Minneapolis Duplex?

Every now and then I have to check the spam folder in my email to make sure something important hasn’t ended up there by accident.

While doing just that the other day I stumbled upon an email from a company that serves as a qualified intermediary for 1031 exchanges. There was a headline and story that caught my eye, resulting in my visiting their website and discovering a terrific tool.

If you’re thinking of selling your Minneapolis duplex, you may be hesitant because you’re concerned about the capital gains tax and depreciation recapture consequences of that sale. The problem is, most of us don’t even have a 30,000-foot idea of how great those consequences would be and aren’t confident enough that we are selling to call our accountants or Realtor for advice.

So we feel stuck.

Enter this fabulous tool I found. While you should always, always speak with your tax advisor before you sell an investment property so that you are fully aware of what the tax consequences will be, you may want to get a rough idea by trying this online calculator I found on IPX 1031’s web site. CALCULATOR.

You just enter what you paid for the property, how much you spent on capital improvements, what you think it will sell for and what your net will be (after closing costs and commissions), and your depreciation and it will give you an idea. Unfortunately, most of us don’t know how much depreciation we reported on our taxes every year, but you could always use the average of 3.636% on a residential property that didn’t depreciate personal property and land improvements.

Anyway, it’s a fun tool to play with and may be helpful if you’re trying to decide what the best path forward is in your real estate investing career.