Advice for military member selling long term rental

[Thomas Mehi]

I was just recently introduced to BP and just in time too as I am selling a house I have owned for 13 yrs. It has been rented for the last 6yrs. I know because I am military I only have to of lived in it for 2 of the last 10 to avoid capital gains (done). I am pretty sure I have to pay recapture of 3.25% for each year over the last 6 ( unless some one know a way to avoid this?). I bought the house in California for 180k and I am looking to sell for 245k ( I had to rehab 27k due to tenant neglect :-( , and then just upgrades for another 15k to get some money out of it). Any tips or tricks from you guys to reduce tax burden, any thing I should prepare for (unforeseen taxes)? This is my first time selling a house so please assume I know bumpkiss. Thanks in advance.

[Jaysen Medhurst]

@Thomas Mehi, I'm not a CPA, but I think you need to live in the house 2 of the last 5 (not 10) years to be exempt from capital gains taxes. You should definitely confirm this with your accountant.

The best way to defer CG taxes is a 1031 exchange. @Dave Foster is the guy to talk to about that.

Since this is California, there may be some other state taxes that come into play.