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From: ark@alice.UucP (Andrew Koenig)
Newsgroups: net.taxes,net.invest
Subject: Re: YA Simple Question
Message-ID: <5797@alice.uUCp>
Date: Tue, 15-Jul-86 20:22:37 EDT
Article-I.D.: alice.5797
Posted: Tue Jul 15 20:22:37 1986
Date-Received: Wed, 16-Jul-86 06:55:46 EDT
References: <712@ihdev.UUCP>
Organization: Bell Labs, Murray Hill
Lines: 12
Xref: watmath net.taxes:1231 net.invest:1585

>	Suppose a person buys a condo for 50K sales price but has
>	a basis of 35K after builder kickbacks/incentives/etc.
>	The condo is depreciated at 5K per year for 2 years and 
>	then sold for 40K.  Now, just to make a real mess, suppose
>	the outstanding mortgage balance on the unit is 45K.
>
>	A simple question:  I believe that the basis is 25K and you'd
>	have to pay long term gains on 40K - 25K = 15K, irregardless
>	of the outstanding mortgage balance.  True or false?

True, as far as I know.  And the mortgage balance
has nothing to do with it.