Taxes for Rental and Non-Rental Home

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
rich126
Posts: 636
Joined: Thu Mar 01, 2018 4:56 pm

Taxes for Rental and Non-Rental Home

Post by rich126 » Tue Sep 10, 2019 1:55 pm

I'm going to find a tax person to discuss this but the more I understand now, the better prepared I will be for that meeting.

I have a single family house that I bought in 2003 and lived in full time from 2003 through late 2011. From 2012 through mid 2019 it was a full time rental and I did not live there a single day (moved out of state). Starting mid 2019 I have moved back into the house.

Although it didn't help me, I understand depreciation had to be taken for the rental years and whenever I sell the place that will affect the taxes I pay.

I know if I hadn't rented out the house and lived there, any capital gains up to $250K (single person) would not be taxable.

Since I did rent it out, how does that affect taxes when I sell the place? Do I lose the $250K capital gain exemption? Is it prorated? At one time I thought you were in the clear if you had lived there something like 2 of the last 5 years but that may have changed or I was always mistaken.

Do repairs, remodeling adjust the cost basis? And if so, does it matter whether those repairs were done when it was or was not rented?

Any good websites that provide examples on this?

I don't have any current plans in selling it but I'm trying to figure out what receipts to keep as I clean out my documents and would like to be prepared in the event I do sell it, to have an idea of what taxes I may owe on it. Originally I had intended to make it my retirement home but now I'm wondering if things are changing too much for me to retire here (getting a bit too built up and traffic is getting worse).

Thanks for any help.

kaneohe
Posts: 5816
Joined: Mon Sep 22, 2008 12:38 pm

Re: Taxes for Rental and Non-Rental Home

Post by kaneohe » Tue Sep 10, 2019 4:47 pm

https://www.kitces.com/blog/limits-to-c ... exclusion/

Might try reading this link..........apparently they changed the law to deal w/ old owners coming back to live in former rentals to reclaim the 2 out of 5 yr requirement. I misunderstood the article the first time around so I won't try to explain it to you. My impression is that the 250K exclusion is still available but only the gains while you were living there count count(to be excluded) and the gains while a rental do not.

Post Reply