Skip to content

Let's keep in touch

Subscribe to our newsletter for timely insights and actionable tips on your real estate journey.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions
Followed Discussions Followed Categories Followed People Followed Locations
Tax, SDIRAs & Cost Segregation
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

User Stats

17
Posts
1
Votes
Blake C.
  • Investor
  • Dallas, TX
1
Votes |
17
Posts

Sell to LLC to avoid tax under 2/5 rule?

Blake C.
  • Investor
  • Dallas, TX
Posted
Question: We purchased and have lived in a home for the last 5 years as our primary residence. In that time it's value has gone up about 40%. We are about to move out and rent it. To fall under the 2 of the last 5 year rule we have 3 years to rent it and avoid paying tax on the gain. However, can I sell it to an LLC that I own within that time frame and avoid paying the tax?"

Most Popular Reply

User Stats

1,561
Posts
2,287
Votes
Brandon Hall
  • CPA
  • Raleigh, NC
2,287
Votes |
1,561
Posts
Brandon Hall
  • CPA
  • Raleigh, NC
Replied

@Blake C. yes, however it's pairing multiple code sections and tax court cases together to form a basis for substantiation. It takes a creative CPA - and that's what people pay me to do :)

Loading replies...