If you own the property and live in the property as your primary residence for at least a total of 24 months out of the last 60 months (2 out of the last 5 years), you can exclude upto $250,000 if you are single or upto $500,000 if you are married from your taxable income under Section 121.

Lying for federal programs or in general ANYTHING is NEVER a good idea.

The Federal Fair Housing Act defines "handicap" (or disability) as "a physical or mental impairment which substantially limits one or more of such person's major life activities".In other words, you can't discriminate against "people with mental illness".

Overall, my goal is to have a good return on my money by keeping a house that I have made some instant equity in from the rehab, but I don't want to see my cash flow drop from $300 a month to negative $300 a month just due to a big corporation like Lloyd's, the Federal government, or global warming.

I've acquired tax foreclosed properties that had tenants with valid lease agreements which became invalid once I took ownership.I am just wondering if there were any federal laws that protect tenants in bank foreclosed properties.

However, there are lots of deductions (expenses) that reduce the rental income and sometimes your overall taxable income resulting in a lower overall tax rate: mortgage interest, depreciation, water/sewer/internet bills if you pay them, property taxes, repairs/maintenance, property management...The is an extra benefit if you work in real estate for a living; it's not hard to read up on the details and criteria for that situation, but I don't know them off the top of my head, and I'm definitely NOT a tax professional.

One is a federal credit union.

From some of the things you're saying it sounds like maybe $5k is the taxable value or the counties estimated value as opposed to the fair market value.

Real Estate Investing Abbreviations *REI Abbreviations* *AFD* - Agreement For Deed *AITD* - All Inclusive Trust Deed *APR* - Annual Percentage Rate *ARM* - Adjustable Rate Mortgage *ARV* - After-Repaired Value *BOM* - Back On Market *BOR* - Board of Realtors *CAD* - County Appraisal District *Cap* - Capitalization *CCIM* - Certified Commercial Investment Member *CCR* - Conditions, Covenants, and Restrictions *CFD* - Contract for Deed *CLTV* - Combined Loan To Value *CMA* - Comparative Market Analysis *COCR* - Cash on Cash Return *COF* - Cost of Funds *COO* - Certificate of Occupancy *CRB* - Certified Residential Broker *CRE* - Creative Real Estate *CRS* - Certified Residential Specialist *DBA* - Doing Business As *DCR* - Debt Coverage Ratio *DOS* - Due On Sale Clause *DOT* - Deed of Trust *DSCR* - Debt Service Coverage Ratio *FCRA* - Fair Credit Reporting Act *FFE* - Furniture, Fixture, and Equipment *FHA* - Federal Housing Administration *FHLMC* - Federal Home Loan Mortgage Corporation, Freddie Mac *FMR* - Fair Market Rent *FMV* - Fair Market Value *FNMA* - Federal National Mortage Association, Fannie Mae *FRBO* - For Rent by Owner *FSBO* - For Sale by Owner *GMAC* - General Motors Acceptance Corporation *GRM* - Gross Rent Multiplier *HELOC* - Home Equity Line of Credit *HML* - Hard Money Lender *HOA* - Homeowners Association *HUD* - Housing and Urban Development *HVAC* - Heating, Ventilation and Air Conditioning *IRA* - Individual Retirement Account *IRC* - Internal Revenue Code *IRR* - Internal Rate of Return *IRS* - Internal Revenue Service *L/O* - Lease Option *L/P* - Lease Purchase *L/S* - Landlord Seller *LIBOR* - London Interbank Offering Rate *LLC* - Limited Liability Company *LOC* - Line of Credit *LOI* - Letter of Intent *LP* - Limited Partnership *LPOA* - Limited Power of Attorney *LTV* - Loan to Value *MAI* - Member Appraisal Institute *MAO* - Maximum Allowable Offer *MIP* - Mortgage Insurance Premium *MLS* - Multiple Listing Service *MUD* - Municipal Utility District *NAR* - National Association of Realtors *NIV* - No Income Verification *NNN* - Triple Net Lease *NOD* - Notice of Default *NOI* - Net Operating Income *NOO* - Non-Owner Occupant *O/F* - Owner Finance *OO* - Owner Occupant *P&S* - Purchase and Sale *PITI* - Principal Interest Taxes Insurance *PMI* - Private Mortgage Insurance *POA* - Power of Attorney *PUD* - Planned Unit Development *REI* - Real Estate Investing / Real Estate Investor *REIA* - Real Estate Investors Association *REIT* - Real Estate Investment Trust *REO* - Real Estate Owned *ROI* - Return On Investment *RTO* - Rent to Own *SFH* - Single Family House *SFR* - Single Family Residence *Sub2* - Buying property subject to existing financing *T/B* - Tenant Buyer *TAA* - Texas Apartment Association *TAR* - Texas Association of Realtors *TIL* - Truth In Lending *TREC* - Texas Real Estate Commission *UBIT* - Unrelated Business Income Tax *UCC* - Uniform Commercial Code *VA* - Department of Veterans Affairs / Veterans Administration K Marie Poe, WDYT?

A 1031 exchange would be one approach to deferring federal income tax on the capital gains.