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Buying & Selling Real Estate

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Alan Russell
  • Investor
  • New Bern, NC
28
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96
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Converting home to rental

Alan Russell
  • Investor
  • New Bern, NC
Posted Jul 16 2014, 09:14

I need to understand what happens to the equity (for tax purposes) if I convert a single family home to a rental property.  Would this convert at a current tax cost basis?  For instance if I purchased a home for 125K and lived in it for 5 years then it appraised at 225K would my cost basis for tax purposes be 225K or 125K?

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