I thought I would start a new thread, since this question is best not buried in another.
If I have a rental house and have been claiming depreciation, and then stop renting the house and use it as my personal residence for at least 2 years, and then sell it and wish to claim the homeowners exemption:
then, is the lowered basis due to the depreciation subject to recapture, or can that be used as part of the exemption amount?
thanks.
This is a new one. When did this new rule come into being? Joe
couple of days ago, with the Housing and Recovery Act of 2008
It looks like this was proposed at one point as part of last year's Mortgage Debt Forgiveness Relief Act, but didn't make the final version.
In addition to the exceptions previously posted, only non-qualified use
*before* use as a primary residence is ineligible for the section 121 exclusion. So if you buy the house first to live in, then move out and rent it, that wouldn't count against you.Also, the gain due to "recaptured" depreciation doesn't enter into the calculation.
-Mark Bole
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