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Updated almost 6 years ago,

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Heath Weddle
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Wish to have current equity realized B4 moving RE into a rental

Heath Weddle
Posted

Sorry for the acronyms, but there is limited characters allowed in the subject box.

Situation:   I have a home which I have lived in for 10 years.   During that time, it has appreciated $400k without the blink of an eye.   We are about to move and we  want to move the property into a rental.   The rental market is awesome here as well.   The rental portion of this is no issue for me as we have several other properties, so we have all that taken care of and I manage them all myself, along with a few others I oversee.

My goal is regarding capital gains tax.  If I sold the home now, I would be excluded unless it netted over $500k.   My concerns is we rent it out for 4 years and need to sell it.  Because it would not have served as my primary residence for at least two years in the five-year period before I sold it, I would be required to pay tax on ALL my appreciation even though so much of it was acquired while I live here.

Is there a way to avoid this. Is there a way to reset my basis point for tax purpose on this property? Can I "sell" it to an LLC or another method. I am truly not trying to defraud anything, but I think there should be a a legal avenue to adjust the basis point for a primary turned rental residence.

Thanks in advance for your thoughts and/or ideas.

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