Worth Selling Home to avoid Capital Gain Tax?

[Rtlguru]

If selling the original primary residence within three years after renting out then no need to 1031.  You get the 500k tax free if lived 2 out of 5 years.

The law changed. It is now prorated if you rent it out 3/5 years, you only get 40% of the 500k tax free.

This isn't necessarily true. It depends when you bought it, when you started renting it and if you took it back to live in. There are scenarios where you can get the capital gain tax free.

Of course it depends - i was just using a simple example of the proration. Fact is, the rules have changed and some people aren't aware of it.

 

[Cornflakes]

You guys went off on tangent. My strategy is to buy another primary home to live in, rent the current one out and 1031 it whenever apt. The owner has two properties. Let the rental be rental forever and never pay taxes. If rental management headache is too much, 1031 into a DST and you have a nice steady cash flow.

 

[Ready2Downsize]

You can't count on taxes remaining the same in the long term. If the feds decide to take away that $500K tax free exemption, he will wish he had sold.

Northwood/Northpark mello is relatively low and I know NW is going to retire mello soon.

Where is he going to go? If he buys a resale, he's buying someone else's problems. At least he knows if there are issues with his own house.

Learned the hard way resale homes come with "issues" that can be covered up and aren't picked up on home inspections.