Switching from primary residence to rental

[Jason Reynolds]

I am moving, and am looking to rent my current home, at least for a couple of years. There is a considerable amount of equity in the home. It has been my primary residence for five years. I have some questions at so how that affects me when tax time comes.

When this property becomes a rental, and then I sell it, will I have to pay capital gains?

If so, will that be only for the appreciation after it became a rental, or the entire appreciation?

What forms should I acquire/file to position myself best for taxes/risk?

Should I get an appraisal to cement the value at this time, for future reference?

Should I do a cash-out refi while it is still my primary?

Thanks in advance for any help you guys can provide.

[Jeff Bridges]

I think you are allowed to still sell with the tax exemption as long as you have lived there within 2 of the last 5 years. So you can theoretically rent out for 2 years, then put it up for sale when tenant moves out at lease end and still take advantage of that tax free exemption when its sold. You'll have to do some math to remove a portion to account for the depreciation you were taking while as a rental, but your CPA can take care of that. You get gain tax free and still get to keep your wife:) Just make sure you track that timeline so you can plan accordingly and not miss the deadlines for you to be able to sell with the gain tax exemption. Good luck!