All Forum Posts by: Jonathan Gray

Thank you all for the advice! It's super helpful. 

I certainly will not be moving back into this property but I was hoping to keep it long term as an income generating property. It seems though that the income I could generate wouldn't be enough to offset the eventual tax hit on it considing the opportunity cost of putting the money to use elsewhere with a higher basis to depreciate. Ironically enough, I feel like the best option for me would be to sell it to myself so that I can capture the gain, releverage it, and depreciate the entire amount over time. But doesn't seem like there's a legal way to do that...

Hello everyone! This is my first post. 

I have been looking into the tax implications of converting my primary residence to a rental and have only grown more confused as my particular situation doesn't seem to be described much on the internet. 

I paid $230k for my place in 2011 and it's now worth $480k. I'm single, so I have earned the maximum $250k I can tax free on this property as a primary residence. I'm looking at buying a house and converting this property in to a rental. However, from what I understand if I do that, it seems I'll lose my capital gains exemption if I don't sell it within 3 years? Excluding land my basis will be only $150k, so to me it seems deciding to keep it as a rental will trigger a huge tax bill when I eventually sell it. Should I just sell this property and look for other investment opportunities, or am I missing something?