All Forum Posts by: Nick Brubaker

@Caroline Gerardo @Ben Firstenberg.  Thanks a lot for your input.  In reading my post again I'm noticing that part of the quote from the message from the insurer got cut out (likely due to my use of "<").  I'm therefore not sure you (particularly Carolina?) got the right details.  The situation is this:

- Property owned by LLC

- Name of Insured on insurance is LLC

- Name on loan is myself directly (don't think LLC was an option)

- After this policy update, lender is telling me to change Name of Insured to my name

So I guess I should go ahead and change the name of insured on my policy to my personal name and have the LLC added as an additional insured? I've seen that suggested in other threads. The insurance policy is already a business policy, so I'm hoping it wouldn't make things more expensive on that end. Any downsides to this change?

Thanks!

Hello all,

I have a rental property bought with cash and owned under an LLC. I later refinanced it (added financing). My insurance policy has recently been discontinued and replaced with a similar policy (really just internal renaming/IDing). Just received a message from my mortgage bank that the:

"Name Insured on the property is not correct. According to our records the Named Insured should read as follows LLC)>. To comply with the terms of your loan, please contact your insurance agent and request the Named Insured on your policy be updated accordingly.."

How do you advise following up on this? The rental is owned under the LLC for a reason. What are the implications of the insurance naming the LLC or my own name (single member LLC btw)? Is there reason to push for keeping the LLC the Named Insured and is that even an option typically?

Thank you.  

Thanks for the advice and taking the time @Bill B.  I think the idea is we would rent out that house for the following 3 years as well, which would justify things more.  But good point regarding selling costs and general opportunity costs. 

@Bill B. To continue this hypothetical tax discussion with a non-CPA : )  What if we buy a second house and make it our primary during that time?  Would be nice if we made it to the 2 year mark on that property, but can't see a case where a project would be that big and where it would make sense to extend to 2 years just for the sake of the 2/5 rule.  @Michael Plaks?

@Bill B. Admittedly this is somewhat theoretical but let me try to focus my question... I live in a house for several years I move out to do a large renovation.  I put $250k in and the value and basis rise $250k (no capital gains from that itself).  That said some capital gains potentially from a year of the appreciation during that time.  I move back in.  No renting.  Do I need to prorate for that period when I later sell?

Out of curiosity, if we just moved out and did a big renovation/addition and then moved back (never renting it out), would capital gains still need to be prorated when ultimately selling the house?  When buying a new property and renovating initially before moving in I'm pretty sure capital gains during that time would be excluded, right?  @Michael Plaks @Bill B.

Thanks @Michael Plaks.  We've been in the house for 6 already.  If we move out for 2-3 years to expand it and rent it for a little while and decide we love the house we still have the option to move back and over time the amount excluded will be close to the full amount (prorating out the 2-3 years we weren't living there)... Correct?  

Hi @Michael Plaks.  It seems like you may be able to speak to a related question I just posted that involves moving back in to the initial primary.  

Thanks a lot for the follow up @Bill B..  Yeah, that's what I'm trying to determine - if on moving back in it would suddenly be treated as a rental-first scenario where everything is prorated.  This seems to be one level too complicated for the internet (or at least the first few search result pages).  I asked ChatGPT too.. haha.  Interestingly it suggested that it would all still be excluded if it was only the 3 years and 2/5 rule maintained, but if longer then we moved back it would be a prorated situation.  

Hi everyone.  We have lived in our house as our primary residence for almost 6 years.  If we move out, convert it to a rental for 3 years, and then sell it, any appreciation during all 9 years (including the period it was rented) would be eligible for capital gains exclusion, correct?

What if after those 3 years renting it out we decide to move back into the house and then a few years later sell it?  Would all the capital gains also be included in this case?

For anyone curious:  The reason this is possible for us is our house is small and we are outgrowing it.  We like it an the neighborhood though, so we're considering moving to a new house while we expand this current one and rent it out at least long enough to meet the 2 year rule (2 our of 5 years for exclusion) in the interim house.  

Thanks.