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Video instructions and help with filling out and completing Fill Form 8815 Acquired

Instructions and Help about Fill Form 8815 Acquired

Music how to report the sale of a US rental property hi my name is Alan Madden from Madden Chartered Accountant in today's video I will show you how to report the sale of a u.s. rental property on a US tax return before watching this video I recommend that you watch my two-part series how to prepare a 1040 non-resident tax return for US rental properties let's look at the example of Justin trupo a Canadian resident who owns a US rental property he purchased the property in 2022 for $100,000 he sold the property on December 31st 2022 for $130,000 Justin paid a commission of 2022 as a real estate agent for selling the property at the end of 2022 justin has claimed total depreciation of ten thousand six hundred and six dollars since he purchased the property justin has to complete form four seven nine seven sale of business property on page one of this form he should write his name at the top in his US tax identification number on page two Justin should write a description of the property example building the date the property was purchased and the date the property was sold next Justin has to calculate the adjusted basis or tax cost of his rental property as follows purchase price 100,000 plus commissions two thousand less depreciation to date ten thousand six hundred and six adjusted basis is equal to 90 1394 the difference between the selling price of a hundred thirty thousand and the adjusted basis of ninety one thousand three ninety four gives rise to a capital gain of thirty eight thousand six hundred and six dollars Music Music the next step is to complete Schedule D but first you need to understand the difference between long term and short term capital gains capital gains can either be treated as long term or short term long term gains arise from a property that is owned for at least one year prior to sale short term gains arise from a property that is sold within one year of purchasing it the reason this distinction is important is because long term capital gains have a lower tax rate since Justin owned the property for more than one year he reported the capital gain of thirty eight thousand six hundred and six dollars in part two of Schedule D called long term capital gains remember to also report this capital gain and the depreciation claim to date on page two of Schedule D the final step is to report the capital gain of thirty eight thousand 6:06 on line 14 of Justin's US tax eternal this capital gain will be added to Justin's total income for more tax tips please click on the subscribe button below and visit our website feel free to follow us on Twitter Facebook Instagram and Google+ don't forget to like comment and subscribe to our YouTube channel see you soon and thanks for watching.

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