All Forum Posts by: Leo Q.

I was hoping you woudlnt say that... I did read on another forum that if i DONT take depreciation that the IRS would still "assume" that I took it but I figured there would be a way to show the IRS that I didn't take it.. but if its a REQUIRED thing to do then that kinda sucks. Is it required regardless of the home being my primary residence and only renting out half the property like a house hack? 

Hey Dave!

Thanks so much for your input. I actually saw you reply to a few house hacking questions related to taxes before creating my own post. So again thanks for being a great asset to this community :D 

Question on #2 and #3. I initially didn't want to claim depreciation just so I dont have to deal with recapture tax but if I do claim depreciation at lets say 10k is it better to do that and avoid rental income tax but then at the time of sale pay the 25% recapture tax OR just not claim depreciation and pay 10k on my "shown profit" tax? if that makes sense?

I did see you comment about doing a 1031 exchange on the rental portion and then capital gain exempt the personal option but how would that work? Say I do profit 500k AFTER cost basis, fees etc.. Would I claim 250k tax free on the personal and then the other 250k I would have to show that It was rolled into a rental property? 

Hello,

I've read that house hacking can cause tax implications at time of sale. One of those things being how much of the property qualifies for the section 121 of either 250k exemption or 500k if married. 

I own a primary residence that I've lived in for 3 years total but for the last 1 year I've been househacking my main floor and I've been occupying my basement. I haven't done taxes yet on my house hack but I was anticipating NOT claiming depreciation so I can avoid recapture tax when I sell the home.. but now im also worried that instead of the 500k that I thought I would be exempt for capital gains I may only have a portion of that available?

Does the IRS care about how long the property have been used as a "rental" to either full qualify or partially qualify for section 121? What would be my best course of action so that I can exempt the full 500k? This is a property that has appreciated significantly so I will need every penny of that 500k exemption.