Sell my house as a primary residence or as a rental property?

1 Reply

@Meagan Gauthier

It depends on the laws in Georgia and if the house is paid off or still mortgaged.

Why I say that? If your house is still mortgaged, it was originally mortgaged as owner occupied, not an investment property. So if you decide to rent it, you need to tell your mortgage company that its being turned into a rental property so they can do the necessary paperwork to list it as an investment property.

The implications for turning it into a rental is now the interest will change, likely for higher. However, now you (depends on how this Trump tax bill works out in 2019) can write off many things that deal with the rental property: depreciation, interest rate, fix and repairs, utility, traveling to rental unit.

If you sell it and gained significant profit from the sale, you will have to pay capital gains tax. Unless you do a 1031 exchange and buy a property of equal or greater value within 2 months of closing on the sale of the primary residence.

So in essence the least amount of taxes is the turning into a rental.

Most taxes is selling without doing a 1031 exchange.