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My wife and I own outright a condo in So Daytona Beach, FL. Our primary residence is in Wyoming.

We would like to sell the condo in Fl and should realize about $50,000 above purchase the price. I plan to take the money from the sale of the condo to pay off the main residence in Wyoming and a few other bills.

Would there be any tax liability other than long term capital gains and the slight depreciation recapture? Further, how will this affect our personal income taxes? The wife and I are both retired and should not be in a high tax bracket. Any other information you require, just let me know.

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    Is the condo property in Florida a rental?
    – mhoran_psprep
    Dec 15, 2014 at 18:30

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As you've already mentioned - you'll have to pay taxes on the depreciation recapture. All the amounts you've depreciated will be taxed at 25%. Any gains left over that will be taxed as capital gains.

In addition, if you have disallowed passive losses related to that condo (and that condo only) - you can deduct them from the gains.

The gains (and the recapture) will add to the AGI, so it will definitely affect your personal taxes to some extent. Whether you'll move to the next bracket or not depends on the rest of your income. The higher AGI may also affect social security payments (if you're getting any) and how they're taxed. Check that.

Neither Wyoming nor Florida have individual income taxes, so you're only paying Federal income tax - that's a good thing.

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    In addition to taxability of Social Security benefits, one other side effect of an increased AGI is that premiums for Medicare Part B and Part D increase. The effect can be quite dramatic because the increase is not gradual but in chunks: For a married couple in MFJ status, a one cent increase in MAGI above $170K will trigger $42 per month per person of additional Medicare Part B premium.
    – Dilip Sarwate
    Dec 16, 2014 at 3:07

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