Stuart A. Bronstein <spamtrap[at]lexregia.com> wrote:
- quote -

If the rental was placed in service and also disposed of the
same year, there is no depreciation expense.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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Stuart A. Bronstein wrote:
- quote -

No, because this was a temporary rental, less than two years,
and no schedule e was necessary.

ChEAr$,
Harlan

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Harlan Lunsford <hnslunsford[at]bellsouth.net> wrote:

- quote -

(less > than a year) and no depreciation was necessary in
this > exceptional case. Income was reported on line 21 of
course > and taxes deducted on schedule a. (no mortgage
interest > involved.)

But when profit is calculated it includes recapture on
depreciation "allowed or allowable." Does that not apply in
that case?

Stu

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joetaxpayer wrote:
- quote -


Well it depends. I have a client who one time moved out of
his personal residence, and rented it out temporarily (less
than a year) and no depreciation was necessary in this
exceptional case. Income was reported on line 21 of course
and taxes deducted on schedule a. (no mortgage interest
involved.)

ChEAr$,
Harlan Lunsford, EA n LA

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Steven C wrote:

- quote -

You may have a larger issue than that. When you put a house
into use as a rental property, you must begin taking
depreciation, it's not optional. Given a depreciation rate
of 27.5 years, 8 years will be about 1/4 the original cost
(you don't include the value of the land). See IRS PUB 527
to get the straight story. The recaptured depreciation is
taxed at 25% I believe. If you haven't taken depreciation,
you may want to consider amending your returns for the past
three years. Your 2003,04,05 returns may all be amended.

JOE

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Steven C wrote:

- quote -

You will need a tax professional for this. There is a
lot more involved than you might think.

Missy Doyle

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chrismon[at]cox-internet.com (Steven=A0C) posted:

- quote -

After you moved out and started renting, that became an
"investment property." You will not only have to pay LT
capital gains, but there will also be a "recapture" of the
depreciation benefits you realized over those 8 years.
Check Pub 544.

Bill

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"Steven C" <chrismon[at]cox-internet.com> wrote:

- quote -

If you want to sell it and buy another rental you can do a
section 1031 exchange and roll the untaxed gain into the
replacement property. This must be arranged ahead of time.
A commercial real estate agent could help you find a 1031
facilitator.

Otherwise you'll owe tax on your gain, including recapture
on the depreciation. See IRS Publications 550 and 551.

--
Phil Marti
Clarksburg, MD

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"Steven C" <chrismon[at]cox-internet.com> wrote

- quote -

Yes, you'll have taxable gains on the sale of your rental
property. The only way around that is to buy a replacement
property for at least as much as the sales price. It's
called a "Section 1031 Exchange" and to do so means you
exchange your current rental property for a property you
continue to rent.

There are some tricks and strict time limitations to 1031
exchanges, so talk to a real estate attorney and your CPA or
EA about the legal and tax implications - PRIOR - to doing
anything. All the rules have to be followed to the letter
for this to work.

Section 1031 timing rules may prohibit you building the
replacement property.

There are also some national companies (maybe someone local
to you) that deal strictly in 1031 exchanges, so look them
up in the phone book, ask for referrals from the realtor, or
do an internet search. They probably are the best option to
get your situation worked out best for you.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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Steven C <chrismon[at]cox-internet.com> wrote:

- quote -

There is something known as a Sectgion 1031 Like-Kind
Exchange, where you can exchange property for Like-Kind
property and defer any resulting gain.

You cannot sell; you must exchange.

But personal use property cannot be involved on either the
old or new propertry side of the deal. So you can exchange
rental property in one state for rental property in another.

If you decide to go this route, you must work with a persona
who will act as a qualified intermediary who knows the
exacting rules involved.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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Steven C wrote:

- quote -

More facts, please. When did you purchase the house (date),
when did you move out and when started to rent it and when do
you expect to sell it.

Correct answer may depend on these dates.

ChEAr$,
Harlan Lunsford, EA n LA

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I have a house that I purchased about 8 years ago in Bryan,
Tx. We no longer live in that city, but I have been renting
the house out since then. If we sell the house and get an
expected gain of 20K, will I have to pay tax on that gain,
or is there a trick to re-invest it or what have you. My
wife and I are thinking about building a new house near
Austin, Tx.

Thanks!

Steven

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