What is total basis for rental property?
Andrew Mclaughlin
Published Mar 24, 2026
This is the total investment in the rental property as it relates to taxes. The cost basis of the rental property consists of the amount you paid for the property, including any expenses related to the sale, transfer and title fees. It also includes the cost of any improvements you made beyond the initial purchase.
How you determine the basis of purchased property?
To find the adjusted basis:
- Start with the original investment in the property.
- Add the cost of major improvements.
- Subtract the amount of allowable depreciation and casualty and theft losses.
How do I calculate cost basis for rental property?
The cost basis for rental real estate is your acquisition cost (including any mortgage debt you obtained) minus the value of the land it’s built on. If you paid $200,000 for a duplex and the land is appraised for $50,000, your basic cost basis is $150,000.
How much does it cost to rent a condo in Florida?
Example: Jean owns a home in a 100-unit condominium in Florida that she has rented out for the last ten years. She paid $100,000 for the unit, so that is her starting basis. During the time that Jean owned the unit, she spent $20,000 to remodel the kitchen and bathroom, and replaced the carpets.
How long do you have to live in rental property before selling?
Living in your rental full-time for at least two years prior to selling can help you take advantage of the gain exclusion of $500,000 ($250,000 if single), which can wipe out all or most of your gain on the property. Sounds easy, right? Let’s take a look at some of the moving pieces for determining the taxes when you sell your rental.
Do you have to pay capital gains when you sell a condo?
Tax Issues When Selling a Condo, Townhouse, or Other Property in a Homeowners’ Association. Save on capital gains tax by including your share of homeowners’ association improvements. When you and sell your home at a profit, you may end up owing capital gains taxes.
What should I add to my adjusted basis for a condo?
When you own a condo, there are two types of improvements, the cost of which should be added to your adjusted basis. The first type are improvements you make to your specific unit–for example, you remodel your kitchen or bathroom.
