Curious if anyone here has experience selling a rental property. I have a rental property that appreciated for 500k to 1M over 10 years. maintenance is getting to be too much for me, and I want to sell it. Other than a 1031 exchange, are there better ways for be tax efficient when selling the property? For 500k of appreciation, I assume I'd pay 100k in taxes assuming 20% long term capital gains tax.
Would suggest moving into it and living for 2 years and then selling so you get $250k tax free single or $500k tax free married
That’s what a lot of people do for that tax break. It’s all about how much you want that 100k. (It’s even more attractive in states like California that tax long term capital gains as income, so it could be more like saving 30%+). If it was making me a lot of money — probably with a super low interest rate — I’d just find a way to simplify the maintenance hassle. If dealing with tenants is an issue, maybe you just need to change how you find tenants. If repairs is an issue, maybe there are some underlying repairs that could be made to simplify things. But it’s a personal thing, figuring out the underlying needed repairs is a fun puzzle for me and I enjoy renting nice properties that attract good tenants.
Meta Looks like even if you don’t move it it stop renting it out to others, you’d still be better off. Meaning you can be there officially but don’t have to move move. PayPal - don’t do it yourself? Is it local or you don’t remotely?
Unless you need capital rn why don't you hire a management company?
You will actually pay more than 20% capital gains due to depreciation recapture. Just make sure you capture everything you spent on improvements, sales, and rental expenses.
Recapture only applies if you’ve accelerated depreciation using cost seg.
This is not true