Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 04-19-2016, 03:17 PM   #21
Recycles dryer sheets
Join Date: Sep 2007
Posts: 113
Originally Posted by Dash man View Post
You have to live in the home for at least two of the previous five years to get the tax breaks on capital gains. The capital gains rate is typically 15%, but some pay 20% if you're in the highest tax bracket. You will have to pay the 25% depreciation recapture tax if you don't live in it for two of the previous five years unless you do a 1031 exchange and rent that property for at least a year before you live in it.
I lived in my OR home for 22 years, and own it out-right (no mortgage), therefore, if I sell it now I would not pay any capital gain.

But if I rent that same house out for few years then sell it, do I still have to pay 15%-20% capital gain tax?

If that is the case, perhaps I should sell my home instead of rent it out.

neihn is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-19-2016, 03:23 PM   #22
Thinks s/he gets paid by the post
Dash man's Avatar
Join Date: Mar 2013
Location: Limerick
Posts: 1,066
You have to have lived in the home as your primary home for two of the previous five years. Sell it within five years and you're okay, though you may have to pay recaptured depreciation for those few years you rented it. Check the IRS site for that.

Sent from my iPhone using Early Retirement Forum

Dash man is offline   Reply With Quote
Old 04-19-2016, 06:27 PM   #23
Recycles dryer sheets
Join Date: Sep 2007
Posts: 113
Thanks Dash man. I will check out the IRS document.
Since the house is paid off - there is no interest pay for rental deduction/depreciation. All the rental income could bump me up to a higher tax bracket (ie > 15%)

It seems I am better off sell the OR home next year.

neihn is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Temporarily took care of a parent. How to put that on resume? paulb Hi, I am... 6 03-29-2014 03:25 PM
Ready to downshift (at least temporarily) at 35 Karloff Young Dreamers 19 09-02-2013 05:37 PM
Should the stock market be temporarily closed until the economy gets better? cloudeleven FIRE and Money 26 02-23-2009 08:54 PM


All times are GMT -6. The time now is 09:02 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.