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Old 04-19-2016, 04:17 PM   #21
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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.

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Old 04-19-2016, 04:23 PM   #22
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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.

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Old 04-19-2016, 07:27 PM   #23
Recycles dryer sheets
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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.

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