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f=> Real Estate
sKSuTij” EUeen M* Day realtor
SHOULD YOU RENT
YOUR HOME?
Some homeowners faced with the need to move may consider renting out their homes instead of selling. What you would be doing, in tax parlance, is converting your primary residence into a rental property. But a decision to convert your own residence to a rental property requires weighing some unique consideration.
For one thing, you’ll be giving up the opportunity to defer taxes on the home when you sell it because the rollover feature on real estate profit applies only to a primary residence that is replaced with another primary residence. In contrast, when rental property is sold, you’ll owe tax that year on any profit you make on the sale.
If you bought your present home prior to 1981, the depreciation effect would be less favorable. That’s when a much faster writeoff schedule (ACRS) took effect. Taxwise, it makes more sense to sell your present home and use any excess cash for investment purposes.
If there is anything we can do to help you in the field of real estate, please phone or drop in at EILEEN M. DAY, Realtor, The Clopton House, Washington, VA 22747. Phone: 675-3400. We’re here to help.
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