Personal Dwelling Gain Exclusion If Turned Into Rental Property?
Please see the topic, "Capital Gains Question???" in the Wholesaling Forum for the original posting of this topic. My response is not getting any replies over there, so I thought I'd reask the question here.
If a taxpayer owns a house, and qualifies for the 2 out of 5 year gain exclusion, but then turns the property into a rental property, and still sells the property so that the taxpayer still lived in the house 2 out of the prior 5 years, they would still be able to exclude the gain, right. I think we reached that census in the other forum.
However, I did not get this question answered. If the taxpayer took a depreciation deduction during the years the property was a rental, they would have to recognize the unrecapured 1250 gain still, right?
Yes, even if capital gains are excluded, depreciation is still recaptured.
Thought so, just thought I'd double check.
Thanks!