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right if I lived in a home for several
years but moved out ten years ago I made
it to a rental what are my tax options
if I sell you want to whack this one too
well your only tax option is going to be
the recognized capital gain or capital
loss on the sale of your home since
you've been at it for ten years you're
not entitled to the five hundred
thousand dollar home or personal home
exclusion so you're gonna have to just
treat her as a sale of an investment
it's an investment property here's the
big thing to think about when you take a
personal residence and you make it into
a rental property which what do you do
you have to do it 114 days a year
but yeah I'm assuming in this case that
they're they're out and they said they
made it into a rent right so I'm
assuming that they're renting it for a
long time you have depreciation
recapture whether or not you depreciate
the house or not this is really messed
up it's same you get you may take
depreciation the the sucker-punch that
they get you with is that whether you
take the depreciation or not you have to
do have to recapture the depreciation
regardless yeah they're cute terminology
is depreciation allowed or allowable
take a nerd or not yep and so if you
could have it so let's say you had a
house I say it was a $300,000 property
$200,000 improved value and you're
writing it off over twenty seven and a
half years you would have ten years of
that recapture on I don't know what the
math would be but it would let's just
put it this way it's not going to be
pleasant
yeah about eighty ninety thousand eighty
or ninety thousand that would be taxed
is to depreciation recapture which it
follows your ordinary bracket is capped
at 25 percent so it's not like it's
earth-shattering but you never wrote it
off in the first place you're getting a
mystery
tax if you did that I would probably be
looking at a 1031 exchange to avoid
recognize
any of it that's really your option it's
an investment or to make it back into a
personal residence and the depreciation
recapture you can never get away from
even in a personal residence you can you
can you have a capital gains exclusion
with the personal residence if you lived
in it - over the last five years but
that's not for dividend or depreciation
capture so we have a we could have us an
issue here a very unpleasant issue for
this taxpayer yeah if you have rental
property that you're not taking
depreciation on hammer for a while let
your accountant know because they can do
what's called a change of accounting
method where we can expense that
depreciation that you didn't take in the
past we can fix this we just don't want
to get in that year or sale and find out
that you may not take a depreciation
that you should have this one scares
your face that's what those little those
little questions where you're like oh
you made it into a rental I hope you'd
appreciate it because it really sucks no
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you