Downsizing to my rental?

[Brandon Norris]

I’m thinking of selling my primary resident and downsizing into my nicest rent house. If I do, I’ll save over a thousand bucks a month! Here’s my question: if I apply the principal from the sale of my PM to pay down my rent house (which is now my primary residence) is it still tax-free? Thanks!!

[Ashish Acharya]

@Brandon Norris, it doesn’t matter what you do with cash after you sell your current PR. If you qualify for the section 121 exclusion from the sale of your PR now, you can buy another house, another rental property, or Lamborghini, that’s not taxable transaction.