Rental Property Conversion

Hi: I converted a commercial rental property I owned 3 yrs ago into a residential rental property, using the 1031 EO. I am now interested in moving into the rental property and making it my primary residence. Will this scenario qualify for the "2 out of 5" year capital gains tax exclusion? Thanks in advance >>>Kelpie

Comments(4)

  • NewKidInTown38th November, 2005

    This is a question for the Tax Strategies Forum.

    Short answer is yes, if you live in the propery as your primary residence for two more years, then you can qualify for the capital gains exclusion since you will have owned the property at least five years before selling.

  • kevnhl258th November, 2005

    i do beleive that you would still owe cap gains tax
    on any gains made from purchase date to the date you converted to primary residence.

  • getitqwik8th November, 2005

    Not trying to sound like a smart a** but the Advisors you used should have been able to answer those questions. I would go through them to get answers to all your tax and legal questions concerning your 1031 Exchange even if it was three years ago. The tax law on the surface looks like it would support a yes, but Conversions can cost dearly if you are wrong. Consult a Tax Accountant/CPA or an attorney.









    [ Edited by getitqwik on Date 11/08/2005 ]

  • NewKidInTown38th November, 2005

    Quote:On 2005-11-08 08:53, kevnhl25 wrote:
    i do beleive that you would still owe cap gains tax
    on any gains made from purchase date to the date you converted to primary residence.Not so, however unrecaptured depreciation will still be recaptured.

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