Rental Basics in Natick>Question Details

Don Gallagher,  in 34209

if i have lived my home 20 years and decide to rent it for 2 years and then sell it the following year , will i pay capital gains tax?

Asked by Don Gallagher, 34209 Thu Sep 2, 2010

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8
Tom and Joanne Team’s answer
Dan:

To get the final yes or no you need to talk with your CPA, but generally speaking as the law is written now as long as you have owned the home for 5 years which you have, and have lived there for 24 months in a row prior to renting you should be fine. The rule was written to proctect people that had been relocated for work reasons. Best
0 votes Thank Flag Link Thu Aug 18, 2011
You should speak with a tax professional. As a realtor, I have an opinion, but the tax code changes and only a professional CPA or attorney can give you the most up to date answer.
0 votes Thank Flag Link Wed Aug 17, 2011
Hi Don,

Diane got the answer in before me and has the best answer, I too have that understanding but as all the rest say, it really is a question for you tax professional.

Sorry, to be so vague but it really is the truth, of course if you need anything else, anyone of us would be very happy to help you.

J
978-335-9092
0 votes Thank Flag Link Fri Sep 3, 2010
Ask a CPA for any Tax related questions.
0 votes Thank Flag Link Fri Sep 3, 2010
Don -
I agree with Chris - real estate agents should not answer tax related questions! If you don't have a tax consultant there are many good sites to research tax questions - I like the Bankrate.com site. The link below will take you to a report on capital gains and home sales. Good luck!

http://www.bankrate.com/finance/money-guides/home-sale-capit… internet sites that you might search for your answer as well.
Web Reference: http://www.hammondre.com
0 votes Thank Flag Link Fri Sep 3, 2010
It's really much harder to sell a home with tenants than either vacant or with the owner, so I would be curious what you view as the benefit to you for doing so. There are many other reasons for not doing that. It's harder to arrange showing the house, sometimes tenants damage the home, or you have to do a lot more painting and repairs. While you may be betting that prices will go up in two years, you may have that idea offset by the value diminished by it not being able to be shown as well as you can present it as homeowners.
A good agent can give you a better idea of prices is your area now, and anticipated prices for several years aheand. Best regards, Terry Bell, Realtor, California
0 votes Thank Flag Link Fri Sep 3, 2010
It is my understanding that you must reside in your home as your primary residence for two out of the last five years to be exempt from capital gains tax. Your benefit would be a $250,000 exemption as a non-married home owner and $500,000 for married homeowners.

Please consult a real estate tax accountant for more definative information regarding your specific situation. Hope that helps! Have a great day and the best of luck to you.

Diane Wheatley, Broker
diane@moveupproperties.com
0 votes Thank Flag Link Thu Sep 2, 2010
Hi Don,

That one would be an easy one for your tax guy. We are not qualified as real estate agents to give tax advise.

Good Luck!

Chris Blasic
Realty World & Associates
0 votes Thank Flag Link Thu Sep 2, 2010
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