Anonymous

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Rainmaker
384,652
Joseph Domino 480-390-6011
HomeSmart - Scottsdale, AZ
Real Estate Made Easy

Actually, you need to speak with a knowledgeable tax professional regarding your situation. Do not assume that because you live in the home as a primary residence that you get to exclude the gains you made during the rental years. The rental years will be considered "nonqualifying" years towards your capital gain exclusion. You may still be on the hook for the gains made during the rental years.

Only someone with intimate knowledge of your prior year taxes can tell you for sure.

May 04, 2018 02:14 PM
Rainmaker
894,690
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

This is a great question, it's not a simple question, everybody who has stated that you need a CPA or tax professional to answer it is correct, and Joseph is the most correct of all!

May 04, 2018 02:40 PM
Rainmaker
1,230,031
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

2/5 year s you must reside in the house. You have 1 year to go.

" if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale"

-IRS

May 04, 2018 02:39 PM
Rainmaker
6,606,449
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

You will find the details on the IRS website.

May 04, 2018 02:28 PM
Rainmaker
611,146
Eve Alexander
Buyers Broker of Florida - Orlando, FL
Exclusively Representing ONLY Orlando Home Buyers

My opinion is that first you have to convert that property into your primary residence...(for tax purposes) then you must have lived there 2 of the last 5 years. 

Then you have to put all of the "gains" into the new property. 

Check with a good CPA.

Eve

 

May 04, 2018 03:57 PM
Rainmaker
1,606,069
Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Even though I think I might have the right answer, I always defer to a tax attorney to help you decide the right course of action. 

May 04, 2018 02:15 PM
Rainmaker
5,586,557
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Like Candice A. Donofrio said, contact your CPA or tax attorney.  They have the answers you need.  A

May 04, 2018 03:10 PM
Rainmaker
4,099,156
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Talk with your tax prepare or a quailed intermediary. 

May 04, 2018 02:50 PM
Rainmaker
4,116,781
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

You need to get that kind of advice from your CPA or tax attorney. Realtors cannot give tax advice without jeopardizing their licenses.

May 04, 2018 02:38 PM
Rainmaker
5,571,886
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

I'm confident a CPA will have the right answer for you....

May 04, 2018 02:21 PM
Ambassador
3,055,932
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

That is a great question to ask your tax professional. 

May 04, 2018 03:45 PM
Ambassador
4,257,353
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

I've always been told 2 of the LAST 5 years but, that is something that you would need to confirm with your CPA, based on the way you have shown rental income on your returns each of those years.

May 04, 2018 03:42 PM
Rainmaker
821,922
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

My understanding is 2 year-wait to be taxed as homeowner. Check with your accountant; difference may not be huge depending on amount of cap gains in  question.

May 04, 2018 03:17 PM
Rainmaker
166,398
Jerry Thomas-Construction Loans
Cranbrook Loans - Farmington Hills, MI
Construction Loans in MI, OH, VA, GA and FL.

Anonymous, we are all trained to "stay in our lane", to only offer legal advice on the topics of buying and selling homes. Anything outside of that, like tax advice, is not what we are specifically train in. 

May 04, 2018 07:12 PM
Ambassador
2,570,787
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

   This is complicated, because you used it as a rental.  First, you have 15 non-qualifying years (see the answer from  Joseph Domino 480-390-6011 ).

         Find a CPA who is skilled in legal tax avoidance; ask her or him what can be done. It is imperative that you comply with the rules and requirements of the Internal Revenue Service.

May 04, 2018 05:45 PM
Ambassador
952,922
Frank Rubi
Frank Rubi Real Estate, LLC - Metairie, LA
FrankRubiRealEstate.com

I always run such question by my CPA.

May 04, 2018 04:16 PM
Rainmaker
529,295
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

The best advise is Seek the answer to this question from a professional CPA ... best wishes!

May 04, 2018 04:06 PM
Ambassador
4,579,275
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

I would check with your CPA.

May 04, 2018 03:51 PM
Rainmaker
2,023,890
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

You need the 2nd year , ALSO

you may have to Recapture all of the Depreciation you took , at 25%  ????

Jun 03, 2018 07:34 AM
Rainmaker
3,069,984
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Joseph Domino 480-390-6011 nailed this one!

May 05, 2018 06:15 AM
Ambassador
3,478,940
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

 

Interesting questions and some good answers but the overwhelming response...get the proper advice from the proper professionals. Then come back and let us know what that person has to say.

May 04, 2018 09:44 PM
Rainmaker
1,596,596
Valeria Mola
SIB Realty - Miami, Sunny Isles Beach - Sunny Isles Beach, FL
305-607-0709 SIB Realty Condos for Sale and Rent

Your question was answered. Great answers. Good luck. 

Oct 30, 2018 11:00 AM
Rainmaker
2,062,524
Evelina Tsigelnitskaya
SIB Realty - Sunny Isles Beach, FL
www.SIBRealty.org 305-931-6931

Great answers are here. 

Oct 30, 2018 10:57 AM
Rainmaker
4,938,383
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

You should speak with your tax professional.

May 08, 2018 09:12 AM
Rainmaker
1,153,550
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Probably not. Call your CPA...

May 05, 2018 06:18 PM
Rainmaker
1,387,173
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

I'd talk to a tax pro on this.  There may be other factors and other things you can do.

May 05, 2018 09:02 AM
Rainmaker
4,433,693
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Talk to your accountant

May 05, 2018 06:37 AM
Rainmaker
4,209,382
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Your CPA can set you straight on qualifying.

May 05, 2018 06:13 AM
Rainmaker
577,189
Gloria Valvasori, Accredited Senior Agent
BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE - Mississauga, ON
REAL Experience | REAL Commitment | REAL Results!

I would check with a knowledgeable Chartered Accountant, or the CRA. or in your case the IRS

May 05, 2018 06:00 AM
Rainmaker
4,799,491
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Good question for your accountant or tax attorney.

May 05, 2018 05:46 AM
Ambassador
4,312,759
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

To be on the safer side, check with IRS.

May 04, 2018 11:42 PM
Ambassador
3,038,940
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Because it was an investment rental my non CPA opinion is you cannot avoid capital gains, but hire a savvy professional to get a professional opinion.  

May 04, 2018 09:27 PM
Ambassador
5,408,079
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

I try to confirm things like this with a professional CPA.

May 04, 2018 09:07 PM
Ambassador
3,986,710
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

I know the answer but if I tell you that makes me a Friday night part-time tax advisor which I am not licensed or qualified to be.

May 04, 2018 08:34 PM
Rainmaker
3,466,165
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Many great responses!

May 04, 2018 08:19 PM
Rainer
482,447
Bruce Kunz
C21 Solid Gold Realty, Brick, NJ, 732-920-2100 - Howell, NJ
REALTOR®, Brick & Howell NJ Homes for Sale

As others have written, you need to consult a tax professional, perhaps a couple, to determine your actual situation.

Good luck,
Bruce

 

 

May 04, 2018 07:44 PM
Rainmaker
1,707,423
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Talk to a CPA.

May 04, 2018 06:49 PM
Rainmaker
1,899,324
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co Notary Services retired RE Broker

It depends on what gain you get from the sale and if you are single or married. I can't tell you with this little information but your accountant should be able to sort it out for you.

May 04, 2018 04:35 PM