House Hacking Tax For Primary Residence
Hello Fellow Investors,
I'm a newbie. Do you have any tips and guidance for House Hacking Tax if I rent out a basement and the master bedroom in a 3bd/3ba house.
What can you deduct if you rent out 50% of your house.
Thank you for your input.
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- Qualified Intermediary for 1031 Exchanges
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@David M. Is correct! If you're house hacking and you and your CPA have clearly sectioned off the part of your house used for investing then you can 1031 the proceeds generated from the portion used for investment. The part you live in would be your primary residence and as long as you live in it 2 of the previous 5 years before you sell it you can get the profit from that portion of your property tax free ($250k if you're single $500k if you're married). That means when you sell you can take advantage of both the 1031 and primary residence exemption to avoid the tax hit.
- Dave Foster
