Hey Angela - That's a solid idea on converting the home to a BnB.

It actually converts to just under 18.5%.

Most leases are for a one-year term and then automatically convert to a month-to-month basis if not renewed.

So if both sides are about the same size, roughly half of your gain could be deferred, and the other half would be taxable since it’s for personal use.Later on, if you hold the property for a while and eventually convert the whole thing to your primary home, you might be able to combine the 1031 rules with the home sale exclusion under Section 121, but that takes careful timing and planning.It’s definitely worth mapping out before you sell so you don’t miss any opportunities.

One other thing to keep in mind in converting a flip to a DSCR, most lenders will allow you to use the appraised value after you've owned the property for 6 months as opposed to your cost.

Instead of just finishing what was started, we went back to the drawing board and converted the property into a 4-bedroom, 3-bath home — a layout far more aligned with the area’s demand.Once the rehab was complete, the property appraised at $269,000.

Need to get away from turbo tax.You are required to keep reporting QBI losses, and they are not "convertible" to real losses.

However, since the property was converted to investment, you are able to do a 1031 exchange and defer all of the tax and depreciation recapture and reinvest it into another investment property/properties.

Why did you convert it from a duplex to a single-family home?

If you intend to list the sofa as a sleeping option, then the convertible sleeper sofa options are great.