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Updated over 3 years ago,
Can I avoid 1031 Exchange and take the $250K exclusion on rental?
I've Googled this extensively, and asked my accountant (who is not a real estate CPA)--
Here are the basics:
--We built the house in 2000
--Divorced in 2009, house was quitclaimed to me
--I lived in the house until mid-2011
--Rented it out from mid- 2011 to present
I am selling it now, moving out of state for a job,and have been trying to avoid a 1031 exchange, AND paying $$$ in taxes. I read IRS Publication 523, to qualify for the exclusion of gain, and it states that:
"You meet the standard requirements if any of the following events occurred during the time you owned and lived in the home you sold" -
- --Became divorced or legally separated
Since I did get divorced while owing the home, am I able to claim the $250K exclusion? I understand that I will be taxed on the recapture of depreciation...and am ok with that, rather paying tax on the whole gain?