If I convert a rental house to my private residence, live in it for two years,can I avoid paying capital?

Question

gains taxes?

Answer 1

Check with the real estate commission about the laws in your state. In Texas you only pay capital gains taxes if the gain is $250,000+ for a single person and $500,000+ for a couple. Housing prices are low in Texas so this is a problem for very few people. Also, I doubt if there are any rent houses in Texas in that price range.

Answer 2

Yes... that's how it works. You'll miss out on those nice write offs for 24 short months, but you won't miss paying capital gains taxes upon the sale.

Answer 3

I'm no expert, but that is precisely what my aunt did with her condo in Snowmass, CO. I think it worked for her. She did have some trouble as I recall with setting it up as her primary residence, though. There was some catch-22 she ran into, where city hall wouldn't approve her application unless she had a mailbox for the place, but the condo association wouldn't let her have a mailbox until city hall approved her application. Something like that. She got past it, but with a little difficulty.

Answer 4

yes, you will avoid to pay capital gain taxes if you will live in this property for 24 months

Answer 5

Capital benefit on which transaction are you relating: The sale of the position of living & the condo, the sale of the 2d well-known position of living, or promoting the well-known position of living you're at present in? they're all separate transactions. the final rule is this is sweet to have lived in a resources for 2 out of the 5 years previous the sale to dodge capital powerful factors tax. with out understanding extra about the specifics of the transactions and their timing this is not available to inform extra.

Answer 6

Yes you can. As long as it is your primary residence for 2 of the last 5 years, the IRS can't touch it. :)

Answer 7

yes. but on the whole that is a great idea