Home Selling in 20194>Question Details

Scott1234, Home Seller in 20194

I am selling primary residence for large loss.. How do I convert to rental property without renting, ie how long do i have to advertise to rent and?

Asked by Scott1234, 20194 Sun Jan 17, 2010

then sell and write off loss?

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6
Scott1234,

You want to sefeguard yourself from committing a fraud - a prison term is NOT worth any amount of money.

You have other legal options available to you - perhaps not as exciting as trying to cheat IRS, but very safe and legal.
0 votes Thank Flag Link Sun Jan 17, 2010
I agree with the other answers that you should consult a tax advisor. You also might want to read this column written by Benny Kass a couple of years ago: http://www.washingtonpost.com/wp-dyn/content/article/2007/07…

Basically, since the the basis of the rental property is the lower of the adjusted basis or fair market value at time of change, there won't be a loss to deduct. Also, he indicates that courts have upheld the limitation of having actually rented the home, not just advertising it for rent. Again, you should consult a tax expert for more information.

If you are considering a short sale, I would be happy to provide you with additional information.

Glenda Cherry
Keller Williams Realty
703-587-3615
glenda@glendacherry.com
http://www.glendacherry.com
0 votes Thank Flag Link Sun Jan 17, 2010
You need to talk to a tax accountant or an attorney about what you are attempting to do.
0 votes Thank Flag Link Sun Jan 17, 2010
Scott,

Dont know what your tax accountant (the right guy) says but sounds like if you have already have moved to your another residence last year some time then you can claim this house as a rental property when you do your taxes for that period of time.
But if you have not and are thinking to convert this to rental before you sell I say, You can only claim it for the period it was actually a rental property. Please talk to tax guy to be exact because there is stuff that we dont know in 3 little lines so may not advise correctly.

Your Question can only properly be answered after understanding your situation. Tax guy will be the best of course but i be happy to brainstorm with you to sort out some stuff, if you like.
Sounds like you will be coming up with cash if you sell this house.. Is there a need to do that? when....or if there are several other options; If I were you I will explore options before I make a decision.

Call me to discuss if and when you feel comfortable.

Rgrds,
Monika
Certified Home Rescue Expert
Helping Neighbors In Need
703 626 3327
Web Reference: http://www.realtygeeks.com
0 votes Thank Flag Link Sun Jan 17, 2010
Your question really needs to be answered by a tax advisor rather than a Realtor in my opinion. I do not think just advertising your home constitutes converting it to a rental.
Do you have it currently on the market? Are you selling it as a Short Sale or do you have enough equity to allow you to sell without loss to the bank?
If you need help selling as a Short Sale I would be happy to discuss that option with you further.

Kathy Stark
Weichert, Realtors
703-201-9656
kathystark@weichert.com
0 votes Thank Flag Link Sun Jan 17, 2010
I think you need to ask a tax lawyer how to do this in a way that you can explain to the IRS when you get audited.
0 votes Thank Flag Link Sun Jan 17, 2010
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