All Forum Posts by: Dina Harleth

@Jon Holdman Thanks again for all the information! So if he never rented the house out, that means his basis is higher, which means mine would be higher if I were to sell, correct? (Not that I am inclined to do so unless it's in the context of the the 0% capital gains tax scenario that K. Marie Poe mentioned). Would the 80% rule of thumb for improvements that I can depreciate at 3.64% be on my father's basis, or the FMV? I assume it would be my father's basis, which, in addition to the depreciation he did not take, is my basis. Yes, I will be sure to consult an accountant about this when it comes time.

But, no, you don't need to be able to qualify for that loan with your day job paycheck.

This is great news! ;) Where would you recommend starting if I wanted to learn more about this? I assume the general steps to be taken are to find an appropriate market, find an appropriate property, make sure the numbers work, secure a loan, etc?

@Bill Exeter Do you have a recommendation for how long I should rent the property out (since it was my primary residence for a couple years) before doing the 1031 exchange? I have heard 2 years but am wondering if a shorter time frame, like 1 year, would be acceptable to the IRS.

Thank you again, everyone!

@Jon Holdman Thank you again for all the extremely helpful, detailed information. As far as I know the house has never been rented; so in that case, all depreciation would be available for deducting, right?

As for buying with leverage, would that not require a high income to secure such a large loan? Or with investment properties is this not the case?

Thank you!

@Bill Exeter For the purpose of getting the homeowner's exclusion, do I need to have lived in the house as the owner? The house was gifted to me almost two years ago, but not quite, though I've been living in it for longer than that. Do I need to wait until two years from the date of the gifting in order to qualify for the homeowner's exemption? Thank you!

@Account Closed I asked my financial advisor about this, who checked with some sort of tax-research service she subscribes to, and they said this was not a possibility. I also spoke with seven other financial advisors in my area who also said this was impossible.

Would you mind giving a few more details about this scenario? Wouldn't the gains on the house put me in a higher tax bracket that year anyway?

Thank you!

I have a financal advisor on retainer for "asset management" but am trying to figure out what to do with my primary residence. I'm somewhat interested in real estate investing and may want to do a 1031 exchange (after renting it for a couple years), but to feel confident proceeding I feel I need someone who has the overall picture of my financial situation and who is knowledgeable enough to guide me about decisions relating to real estate. My impression after meeting with many financial advisors is that their expertise is mainly in securities and that they don't know much about real estate investing or the tax implications involved.

For those of you who have someone managing your investments in securities, has this been your experience as well? It makes sense to me that in this highly specialized world asset managers would focus on equities, since that's what they're dealing with on a daily basis, and pay little attention to real estate investing. Am I wrong? Is it possible to find someone who's very knowledgeable in both?

Thank you. I'll take your advice and go that route. I also posted a related thread about this to get some general feedback as well.

Thanks again for the tips on selling with no capital gains; I hope I'll be able to go that route. It seems even more ideal than a 1031 exchange!

Thank you for the explanation!

As for financial advisors, the one I chose is a fiduciary. She said it would be a conflict of interest for her to advise me about the sale of my house. I'm not sure where to find financial advisors that are knowlegable about real estate and feel comfortable advising about such matters. Are there any you know of, by any chance? I'm in Southern California.

@Jon Holdman My father bought the house in 1982. Does the method of depreciation you detailed still apply?

You wrote:

There is no way I would rent a $940K house unless you get something like $10K a month. You will generate much more income if you sell it and 1031 the profits into a different property or properties. With that much cash you could get into a much larger property that generates much more rental income.

Could you please briefly outline how to do this? Would it require taking out a loan to purchase a large multi-unit? If I didn't want to do that, and just wanted to use 900k-1 million in equity, how much ROI could I expect?

Thank you!

Funnily enough, I just hired a fee-only financial advisor to handle my investments. When I brought this up with her she said to ask a CPA as she doesn't know much about taxes. I thought it was acceptable for a financial advisor to not know all the details about the tax code, but maybe I was wrong and should start looking for another advisor. Aren't most advisors' background in equities and not real estate? How would I go about finding someone who could help me with this?

Still curious about how I could potentially not owe anything in taxes (besides doing so via a 1031 exchange). Could someone give me a brief sketch?

A huge thanks to all of you!

@Bill Exeter That is great news; thanks so much for letting me know! I am SO relieved to hear that in an emergency I could move into the investment property at any time. That piece of information is so vital in helping me make the decision about selling vs exchanging.