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Used to Rent It Out |
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I will be selling my home that I live in and and have lived in for about three years. Before that I rented it for about 8 years and took all the depreciation breaks. My understanding is that I can avoid the capital gains tax having lived in it more than 2 of the last 5, but I may have to declare the sale and pay back the depreciation of the rental years. Can you tell me the facts about selling a house under these conditions, and should I get with a tax accountant? |
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Yes, recaptured depreciation must be recaptured (taxed at a higher rate than the rest of your profit.) Besides that, there's a new law for a home that had previously been used as a rental. The calculation of how much of the homeseller's exclusion can be used is rather complicated, and you will certainly need the help for a good tax professional for your return. |
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Originally published on February 20, 2009 |
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