11-03-2021, 09:57 AM
(11-02-2021, 07:32 PM)NilesMike Wrote:(11-02-2021, 01:58 PM)ken-do-nim Wrote:(11-02-2021, 01:31 PM)ChadR Wrote: Ken, I would advise you not to do #7. Turning a primary residence into a rental is a mistake. You are giving up to $250k ($500k) tax free profit from the sale of your primary residence. If you turn it into a rental, you have a lower depreciable base and you just gave up a huge tax free gain. If you really want a rental, sell the house and then turn around a buy a rental for what you just sold your primary residence for.
Wow, I didn't know that! Thanks for the advice!
You can regain your favorable tax position again if you wish. Have to live in it 3of the past 5 years or something like that, I might be a little foggy on that it's been awhile since I've looked into that.
This method will work a little bit. Problem with this method is that you have to take the gain you have and allocate it between primary residence years and rental years. So depending on how long it was a rental, you could make a big portion of the gain taxable.