Developer · Youngstown, OH · Member since 2019 · 129 posts · 121 votes
Hi. I have a rental that I'd like to turn into my primary. NOT to avoid capital gains and then sell it after a couple years. This would be turning it into a primary and living there probably the rest of my life.
So my questions:
1. Is it better to transfer from LLC to our name? Or for us to buy it for what's owed on it from the LLC?
2. If we never sell it, how do they handle the depreciation taken?
3. Is there a length of time you can live in it so that when you die, your heirs aren't paying capital gains on it?
We do not want to do a 1031 exchange on it (at least we don't think we want to)
Thank you and if there's any other info I should know, thanks for that, too.
I've looked online and all I can find is info on ppl who move into their rental to try to avoid capital gains when they sell in a couple years, and that's just not our situation.
All your rentals and your primary should be capital gains free to your heirs the day you die even if you bought the property the day before you died. No time limit.
I don’t think there’s any reason to transfer from llc to your name.
Your cpa will determine if converting it your primary is a reason to pay the depreciation that year.
Ps. Not your situation, but any property that was a rental first is never capital gains free at sale time. When it’s a rental property first you get the percent item it was your primary tax free. (Say rental for 10 years then primary for 5. Then 33% capital gains tax free, all recapture still owed.)