All Forum Posts by: Susannah Bonn

Thank you @Dave Foster!  I knew I was missing something.

Got it!  Thank you both!

Do you pay capital gains taxes when you sell in a house that you lived in for two years and then rented out for three?  It fits the 2/5 year rule but not sure whether it fits the "primary residence" part.  Does the rule assume you'll rent it for the other portion of the 5 years or that you'll leave it vacant in order to call it your "primary residence"?  Thank you!

Thanks so much, @Wes Blackwell!

We don’t need the cash now. We have no other rentals now but would like to start buying, probably out of state. Good point about the dry rot needing to be fixed regardless. Maybe we hold on a bit longer, hope the pipes hold out, and 1030 exchange to buy some out of state properties.

Thanks again!

My boyfriend and I are wondering what to do with his rental that he lived in before we met. He bought a 3/2 in 2013 in Woodland, CA (near Davis):

Purchase price: 155k

Financing: 30 year fixed, 4% down, 3.25% interest rate.

Market rent: 1,450/month

Cash flow: ~ 330/month

Estimated value: 260K-275K

We’re trying to decide whether to sell in the next year to avoid paying capital gains and some expensive potential repairs (we’re 5 years into a 15 year roof, have some dry rot under one of the bathrooms that could cost 5k to fix, the electrical panel should be replaced and brought to code at some point for $1500-$2K, and we recently had plumbing problems that uncovered orangeburg main leach lines (50s era) that are falling apart and may last a few more years or maybe only a few months. Replacement quote for the main line from the house to the street is $5k).

Any advice would be much appreciated!