topic Selling an investment house I currently live in in Investing

Selling an investment house I currently live in

djohnson69401 — Wed, 29 Jan 2025 18:49:16 GMT

Hello and thanks for responding-

I bought a house 10yrs ago to renovate and sell, but ended up renting it out and had to move back in 3 yrs ago.

I took depreciation for the 5 yrs ($35k) after it was renovated (2yrs) and while renting, then stopped depcreciation when I moved back in.

Since I lived in it for 3yrs, but was an investment first; can I use the IRC 121 for the $250k exclusion? And do I owe on the depcreciation recapture?

Re: Selling an investment house I currently live in

MinhT1 — Wed, 29 Jan 2025 18:53:37 GMT

Since you have lived in the house for more than 2 years in the last 5 years before the house is sold, you are eligible for the capital exclusion of $250,000 ($500,000 if filing jointly).

Please read this IRS document for more information.

You have to recapture the allowable depreciation while the house was rented and pay tax on the recapture..

Re: Selling an investment house I currently live in

djohnson69401 — Thu, 30 Jan 2025 02:27:41 GMT

Thanks for the response.

For some reason it was mentioned to me that if it was an investment to begin with it would be treat differently, even if I lived in it 2 out of 5 yrs.

I thought your response was what I had read, but wanted to confirm.