Claiming Depreciation and Calculating Tax Payable on Condo Sales

If you do not use your condo as a primary residence and wish to claim deprecation on your property eventually you will face a tax liability when you sell your condo. This is of course if you manage to sell your condo than more than you paid for it, less whatever deprecation was claimed on the property during the span of ownership. 

 For instance if you owned a condo property for about 10 years and sold it, and during that time frame you depreciated half the value of the property, not including the value of the land. Being a condo, the land component of the total property value will be a very small percentage.  

On the sale of land you would calculate any recapture of the deprecation which was gained through the sale of the property. So for instance if you had a property that you purchased for $50,000 and you depreciated a value of 30,000 dollars over that time frame, then went out and sold that condo for $60,000 you would now have to not only include that $5,000 (50% of $10,000 capital gain) profit into business income, (investment income) but you would also have to include the $30,000 dollars as recapture, which you had used to reduce your business income from the condo rental. 


On the business income section of your tax return with supporting forms and receipts you would have $40,000 plus any additional rental income less expenses for this one business property.