All Forum Posts by: Mandeep Randhawa

how long do you have to wait before you can move into the property and use it as a primary residence?

Background...

I'm selling my rental house and using that money towards a home I eventually want to move into.

Thanks for the quick replies.

My 2011 and 2012 look good, my credit score is great, I will be doing 20 percent down, but I do have a high debt to income ratio so 2013 taxes won't look as good on paper. I have started to work with a loan agent recently, but just wanted to get another opinion from all the folks here.

I guess what I would like to know is...what's the best way to tackle this and maximize borrowing power.

will they want my 2013 taxes to be filed before I purchase which will be in late March early April? The reason I ask this is that I opened a dental office(S corp) in 2013 and it will show losses, but I would like to maximize the amount that I can get for a new home so would an extension on my taxes allow that for me? Or will they ask for a profit loss statement etc?

Thanks guys. Appreciate the info. I guess when Jan 1 rolls around I'll start looking for a rental(future home) and sell my current rental when the lease is up in May.

Can you purchase another rental property first then sell the other rental property later, but in the same year? Or does it have to be sell one then buy one?

I really appreciate all this information. Let's say if I sell my rental and purchase another rental...do the 1031 to defer my taxes. Rent it out for a couple years and then move in myself and stay there for more than 2 years as my residence...would you still owe on the taxes? I think the answer is yes, but just want to make sure.

I'm a little confused. David said you sell your rental to purchase another rental of equal or higher value and not get hit with capital gains tax, but it seems like you are saying that unless I stay in there for 2 years, I won't be able to get much tax relief. Can you explain?

Currently my loan is for 90k at 15 year, 3.3% and my payment is about 670. I could do a cash out refi and pull out 90k, 30 year loan, 4% interest rate and pay 891 per month. or 15 year at 1292 per month. At 30 year payment I would make a little$100) and with 15 year I would pay a little(200).

I guess ultimately I would like to sell my current rental and purchase a bigger rental that I would ultimatley move into...about 2 years with little to no tax implications....is that possible?

Thanks for the quick reply David. I understand 2 and 3. For some reason I don't understand 1. Could you explain a little more on that? Do you mean if you sold your personal residence(and did not buy another) and had a gain that you wouldn't be taxed on it up to 250k for single and 500k for married?

Background info...I still live with my parents in Ca and I purchased an investment property April 2012 at auction. I purchased for 139,000. Eventually did a conventional loan (25%) and currently owe 90k. Similar homes have been selling for 240k. I have yet to file my taxs for 2012. I currently have renters in there now. I was thinking about doing a cash out refinance right now(pay down my student loan debt at 6.2%) and then sell the home in about 2 years and then purchase a home to live in.

So my question is if I sell a rental property and then purchase a place to live in...would I get hit with capital gains tax? I have heard that you have to be living in the property for 2 years for you not to get hit with capital gains if you are purchasing a property to live in...is this true? What's the best way to work around this?

Should I just sell my rental now and then purchase the house I want to evenutally live in(rent it out about 2 years) then move in? That seems like the least complicated way.