How the Tax Implications of Selling a Rental Property Work

Lucas and Luna walk through the tax consequences of selling a rental property in 2026, focusing on depreciation recapture, Section 121 exclusion limits, and the 3.8 percent net investment income tax. They use a concrete example: a property bought for $300,000, depreciated over 27.5 years, and sold for $450,000. Lucas explains how the unrecaptured Section 1250 gain is taxed at a maximum 25 percent, and how the capital gains tax and NIIT stack. Luna asks about the homeowner's capital gains exclusion and whether it applies to former primary residences turned rentals. The episode closes with a practical takeaway: timing the sale to avoid a high-income year. #TaxImplications #RentalProperty #DepreciationRecapture #Section1250 #CapitalGains #NetInvestmentIncomeTax #Section121 #RealEstateTax #TaxStrategy #Fexingo #BusinessPodcast #Finance #TaxPlanning #PropertySale #RentalIncome #TaxLaw #PodcastEpisode #TaxTips Keep every episode free: buymeacoffee.com/fexingo