Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
I lived in the house bought as a primary residence for 1.5 years. Rented it out for 4 or so years after. Moved back in for 2 years with the intent to rent it back out after I moved back out again (moved back in after I sold my other house I was living in). It's been listed for 2 months and all I get are around 500 credit score applicants now. Wasn't like that before. Never had any vacancies even in winter.
So I'm wondering if it just being listed as a rental the last two months combined with it being a rental previously qualifies it as a rental for 1031 exchange or not.
Investor/Accountant/Builder · Meno, OK · Member since 2014 · 1k+ posts · 918 votes
6y
Qualifies until you get audited.
You really need to talk to your tax advisor Has it stayed on your schedule E for the entire time?
Is there going to be an actual gain on the sale. If you have been living in it for 2years or more it should not be taxable when sold, unless you have been deducting depreciation. See your tax man.
Investor/Accountant/Builder · Meno, OK · Member since 2014 · 1k+ posts · 918 votes
6y
Qualifies until you get audited.
You really need to talk to your tax advisor Has it stayed on your schedule E for the entire time?
Is there going to be an actual gain on the sale. If you have been living in it for 2years or more it should not be taxable when sold, unless you have been deducting depreciation. See your tax man.
You really need to talk to your tax advisor Has it stayed on your schedule E for the entire time?
Is there going to be an actual gain on the sale. If you have been living in it for 2years or more it should not be taxable when sold, unless you have been deducting depreciation. See your tax man.
The 2/5 year rule does not work the way you think it does once it's been a rental, so much bad information on this forum. I live in Seattle as my profile clearly states. I said I've owned the house basically 7 years and you're asking me if in 7 years property values have gone up at all/the house has gained value/are there even gains to claim?
And then you tell me that the gains are not taxable unless I've been deducting appreciation? Ummm...there is depreciation RECAPTURE but that has nothing to do with capital gains being taxed or not, and depreciation recapture happens whether you use it or not on your returns.
Dude you really should not post information as literally NOTHING you said is accurate at all. And your profile even says you're an accountant...
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
6y
@Jack B. Yes it qualifies as it had been a rental, even though it is currently empty. Yeah, you’re right about the 12-, the exemption would be prorated....but, you can shield part of the gain thrust the prorated 121, and exchange to defer the rest of the cap gain/depreciation recapture.
Investor/Accountant/Builder · Meno, OK · Member since 2014 · 1k+ posts · 918 votes
6y
@Jack B.
All I did was ask you a coupe of questions and tell you twice to see a tax advisor. Why would you ask anything on this forum when you know all the answers? Sorry to bother you.
You can certainly 121 tax free gain for 2 out of last 6 years (1/3rd) I don’t know how that first 1.5 years comes in to effect. If it counts as owner occupied or counts as rental use or gets ignored.(because of the rental use in the middle.) @Dave Foster probably knows.
Make sure it’s worth it to defer the 2/3rds (or less, depending on that first 1.5 years) tax bill at 15% and tiny depreciation recapture tax bill at 25%. If it is, start looking for properties to purchase and list your place for sale.