Think Twice Before Moving Into Your Rental To Avoid Taxes

by zacce​

The IRS doesn’t want people abusing the five-year rule with rentals that they move back into just before the sale.
If you rent out your property for two years and then move back in for two years before selling it, you must prorate your exclusion because the exception to periods of non-qualifying use only applies to portions of the five-year use test period that occur after the last date that the property is used as a principal residence

I am sharing this because 2 out of 5 year rule has slightly changed but people may not be aware of the change.
source: www.merriman.com/wealth-preservation/planning-on-moving-back-into-your-rental-in-the-future-read-this-first/

 

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