You have to pay taxes on properties that generate an income. The amount of tax depends on how much the property has depreciated since the time of purchase. If you are selling the property halfway through the tax year, take into account a half a year's worth of depreciation for your next tax return.
Calculate the annual depreciation of the property; divide the price paid for the asset divided by its useful life. The useful life of the asset depends on the asset type. For example, the Internal Revenue Service states that the useful life of computers is five years, but the useful life of farm buildings is 20 years. Let's say that you bought a farm property for $150,000. The land value was $50,000, which means that the building is valued at $100,000. Dividing $100,000 by its useful life of 20 years gives an annual depreciation of $5,000.
Multiply the annual depreciation of the asset by the number of years the asset was held. So, if you owned the property for 10 and a half years, multiplying $5,000 by 10 and a half gives $52,500 of total depreciation. As you are selling the asset midyear, a half year is added on to the depreciation calculation.
Subtract the total depreciation from the value of the property to obtain its depreciated value. Using the same example, subtracting $52,000 from $100,000 gives a total depreciated value of $47,500. It is this value that you report to the IRS for tax purposes.