Capital Gains

[senlick]

In 1993, I purchased a house from my grandmother for much less than the value, and she awarded me the equity in the house. We lived there for three years, and have rented out the property since 1996. We are now ready to sell, we will be subject to capital gains?

 

[Chas. Strawn]

Yes. You no longer use it as residential property, and there would be a tax based on the difference between (1) the sale price net of expenses and depreciation you took and (2) the purchase price plus any improvements you made.