Making a Quick Sale: Is the Money from Selling Your Rental House Considered Income?

Are you a landlord who’s looking to sell your rental property? Selling a rental house can be a great way to make money and move on to other investment opportunities. However, before you put your rental property on the market, it’s important to understand the tax implications of selling your rental house.

The Rental House Selling Process

The process of selling a rental house is similar to selling any other property. You’ll need to find a cash home buyer, list your property, and negotiate with potential buyers. However, as a landlord, you’ll need to take extra steps to ensure that your tenants are not inconvenienced during the selling process.

Before you list your rental property for sale, make sure you give your tenants notice. You should also be prepared to show the property to potential buyers while your tenants are still living there. If your tenants are on a lease, you’ll need to honor the terms of the lease until it expires. If your tenants are on a month-to-month lease, you’ll need to give them notice before you can terminate their tenancy.

Tax Implications of Selling Your Rental Property

When you sell your rental house, you’ll need to pay taxes on any capital gains you make. Capital gains are the difference between the amount you paid for the property and the amount you sell it for. However, not all of the money you make from selling your rental house will be considered income.

Determining the Tax Basis of Your Rental Property

To determine the tax basis of your rental property, you’ll need to add up all of the costs associated with buying and owning the property. This includes the

• Purchase price
• Closing costs,
• Improvements you made to the property.

Once you’ve determined the tax basis of your rental property, you’ll need to subtract it from the amount you sell the property for. This will give you your capital gains.

Calculating Your Capital Gains Tax

Your capital gains tax rate will depend on how long you owned the property. If you owned the property for more than a year, you’ll pay a long-term capital gains tax. If you owned the property for less than a year, you’ll pay a short-term capital gains tax.

The long-term capital gains tax rate is generally lower than the short-term capital gains tax rate. However, the exact rate will depend on your income and other factors.

Exceptions to the Capital Gains Tax

There are some exceptions to the capital gains tax that may apply to you if you’re selling your rental house. For example, if you’re selling the property because of a job relocation, you may be able to exclude up to $250,000 of the capital gains from your income if you’re single or up to $500,000 if you’re married.

Another exception to the capital gains tax is if you’re selling the property as part of a 1031 exchange. This allows you to defer paying taxes on the capital gains if you use the proceeds from the sale to buy another investment property.

Tips for Selling Your Rental House Fast

If you want to sell your rental house fast, there are a few things you can do to make your property more attractive to potential buyers.

Preparing Your Rental House for Sale

Before you list your rental property for sale, make sure it’s in good condition. Clean the property and make any necessary repairs. You may also want to stage the property to make it more attractive to potential buyers.

Setting the Right Price for Your Rental House

Pricing your rental property correctly is key to selling it quickly. You’ll want to price it competitively to attract buyers, but not so low that you lose money. A local home buyers in Kansas City, Missouri can help you price your home with a fair cash offer.

Finding the Right Buyer for Your Rental House

When selling your rental house, you’ll want to find a buyer who is willing to take on your tenants if they’re still living there. You may also want to consider selling to another landlord who is looking to add to their rental property portfolio.

Making the Decision to Sell Your Rental House

Selling your rental house can be a great way to make money and move on to other investment opportunities. However, it’s important to understand the tax implications of selling your rental property before you put it on the market. By following these tips, you can sell your rental property quickly and with minimal hassle.

So, if you’re ready to sell your rental house fast, make sure you take the time to prepare your property, set the right price, and find the right buyer. With a little effort, you can sell your rental property quickly and move on to your next investment opportunity.

Sell Your House Fast in Kansas City, Missouri

If you need to sell your house fast but don’t want the hassle of a traditional home sale, contact KC Real Estate Buyers. We buy houses as-is. No repairs are needed. Avoid closing costs and realtor commissions. Close in as little as seven days. Call 816-895-2999 to get a fast cash offer from our local home buyers in Missouri.