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Updated almost 3 years ago,
Tax on appreciation when converting home to rental
I'm aware that if you sell a home that you've lived in for 2 years, and use that money toward a new home you will live in, that the tax on appreciation is waived. This compared to investment properties, where that tax is merely deferred.
I'm considering living in a home for two years and *then* moving out and using it as a rental. But it sounds like I'd miss out on those tax benefits (I'd have to pay taxes on the appreciation for the period where I lived there).
Is there any way around that? For example, if I live in the home for 2 years, then move out and rent it out for 8 years and then sell it, can I provide documentation to an accountant and waive taxes on the first two years of appreciation, and defer taxes on the 8 years where I use it as a rental?