Anonymous

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Rainmaker
71,489
Joseph Domino 480-390-6011
HomeSmart - Scottsdale, AZ
Real Estate Made Easy

Actually, you need to speak with a knowledgeable tax professional regarding your situation. Do not assume that because you live in the home as a primary residence that you get to exclude the gains you made during the rental years. The rental years will be considered "nonqualifying" years towards your capital gain exclusion. You may still be on the hook for the gains made during the rental years.

Only someone with intimate knowledge of your prior year taxes can tell you for sure.

May 04, 2018 02:14 PM
Rainmaker
557,024
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

This is a great question, it's not a simple question, everybody who has stated that you need a CPA or tax professional to answer it is correct, and Joseph is the most correct of all!

May 04, 2018 02:40 PM
Rainmaker
782,847
Thomas J. Nelson, Realtor, ePRO, CRS, RCS-D
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

2/5 year s you must reside in the house. You have 1 year to go.

" if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale"

-IRS

May 04, 2018 02:39 PM
Rainmaker
4,552,751
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

You will find the details on the IRS website.

May 04, 2018 02:28 PM
Rainmaker
483,322
Mike & Eve Alexander
Buyers Broker of Florida - Orlando, FL
Exclusively Representing ONLY Orlando Home Buyers

My opinion is that first you have to convert that property into your primary residence...(for tax purposes) then you must have lived there 2 of the last 5 years. 

Then you have to put all of the "gains" into the new property. 

Check with a good CPA.

Eve

 

May 04, 2018 03:57 PM
Rainmaker
849,103
Sheri Sperry - MCNE®
Coldwell Banker Residential Brokerage - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Even though I think I might have the right answer, I always defer to a tax attorney to help you decide the right course of action. 

May 04, 2018 02:15 PM
Rainmaker
3,681,828
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Like Candice A. Donofrio said, contact your CPA or tax attorney.  They have the answers you need.  A

May 04, 2018 03:10 PM
Rainmaker
2,855,323
Michael Jacobs
Coldwell Banker Residential Brokerage - Pasadena, CA
Los Angeles Pasadena Area Real Estate 818.516.4393

Talk with your tax prepare or a quailed intermediary. 

May 04, 2018 02:50 PM
Rainmaker
2,346,851
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

You need to get that kind of advice from your CPA or tax attorney. Realtors cannot give tax advice without jeopardizing their licenses.

May 04, 2018 02:38 PM
Rainmaker
4,213,792
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

I'm confident a CPA will have the right answer for you....

May 04, 2018 02:21 PM
Rainmaker
2,574,016
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

That is a great question to ask your tax professional. 

May 04, 2018 03:45 PM
Ambassador
2,479,638
Debe Maxwell, CRS
www.AtHomesCharlotte.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

I've always been told 2 of the LAST 5 years but, that is something that you would need to confirm with your CPA, based on the way you have shown rental income on your returns each of those years.

May 04, 2018 03:42 PM
Rainmaker
661,534
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

My understanding is 2 year-wait to be taxed as homeowner. Check with your accountant; difference may not be huge depending on amount of cap gains in  question.

May 04, 2018 03:17 PM
Rainmaker
19,533
Jerry Thomas-Construction Loans
Cranbrook Loans - Farmington Hills, MI
Construction Loans Conv/FHA/VA

Anonymous, we are all trained to "stay in our lane", to only offer legal advice on the topics of buying and selling homes. Anything outside of that, like tax advice, is not what we are specifically train in. 

May 04, 2018 07:12 PM
Ambassador
2,017,420
Fred Griffin
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

   This is complicated, because you used it as a rental.  First, you have 15 non-qualifying years (see the answer from  Joseph Domino 480-390-6011 ).

         Find a CPA who is skilled in legal tax avoidance; ask her or him what can be done. It is imperative that you comply with the rules and requirements of the Internal Revenue Service.

May 04, 2018 05:45 PM
Ambassador
860,126
Frank Rubi
Frank Rubi Real Estate, LLC - Metairie, LA
FrankRubiRealEstate.com

I always run such question by my CPA.

May 04, 2018 04:16 PM
Rainmaker
349,616
Diana Dahlberg
1 MONTH REALTY - Kenosha, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

The best advise is Seek the answer to this question from a professional CPA ... best wishes!

May 04, 2018 04:06 PM
Ambassador
3,550,975
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

I would check with your CPA.

May 04, 2018 03:51 PM
Rainmaker
2,881,454
Tony and Suzanne Marriott, Associate Brokers
BVO Luxury Group @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Joseph Domino 480-390-6011 nailed this one!

May 05, 2018 06:15 AM
Ambassador
2,673,458
Margaret Rome, Baltimore Maryland
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

 

Interesting questions and some good answers but the overwhelming response...get the proper advice from the proper professionals. Then come back and let us know what that person has to say.

May 04, 2018 09:44 PM
Rainmaker
3,481,654
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

You should speak with your tax professional.

May 08, 2018 09:12 AM
Rainmaker
839,438
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Probably not. Call your CPA...

May 05, 2018 06:18 PM
Rainmaker
1,055,890
Ryan Huggins - Thousand Oaks, CA
www.HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

I'd talk to a tax pro on this.  There may be other factors and other things you can do.

May 05, 2018 09:02 AM
Rainmaker
3,954,205
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Talk to your accountant

May 05, 2018 06:37 AM
Rainmaker
2,600,106
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker

Your CPA can set you straight on qualifying.

May 05, 2018 06:13 AM
Rainmaker
527,882
Gloria Valvasori, Accredited Senior Agent
BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE - Mississauga, ON
REAL Experience | REAL Commitment | REAL Results!

I would check with a knowledgeable Chartered Accountant, or the CRA. or in your case the IRS

May 05, 2018 06:00 AM
Rainmaker
4,197,490
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Good question for your accountant or tax attorney.

May 05, 2018 05:46 AM
Ambassador
3,926,906
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

To be on the safer side, check with IRS.

May 04, 2018 11:42 PM
Ambassador
2,702,380
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Because it was an investment rental my non CPA opinion is you cannot avoid capital gains, but hire a savvy professional to get a professional opinion.  

May 04, 2018 09:27 PM
Ambassador
3,349,442
Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams fox cities - Stevens Point, WI
Forestland Experts! 715-204-9671

I try to confirm things like this with a professional CPA.

May 04, 2018 09:07 PM
Ambassador
3,627,665
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

I know the answer but if I tell you that makes me a Friday night part-time tax advisor which I am not licensed or qualified to be.

May 04, 2018 08:34 PM
Rainmaker
2,334,035
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Many great responses!

May 04, 2018 08:19 PM
Rainmaker
416,069
Bruce Kunz
C21 Solid Gold Realty, Brick, NJ, 732-920-2100 - Howell, NJ
REALTOR®, Brick & Howell NJ Homes for Sale

As others have written, you need to consult a tax professional, perhaps a couple, to determine your actual situation.

Good luck,
Bruce

 

 

May 04, 2018 07:44 PM
Ambassador
1,341,731
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Talk to a CPA.

May 04, 2018 06:49 PM
Rainmaker
1,188,604
Bob "RealMan" Timm
Alliance Real Estate - Minot - Minot, ND
Bob Timm, Broker Associate, Alliance Real Estate

It depends on what gain you get from the sale and if you are single or married. I can't tell you with this little information but your accountant should be able to sort it out for you.

May 04, 2018 04:35 PM