Accepted Answer

Stephanie, there are several things to consider when deciding whether or not to convert property into rental property. First of all, often enough, rentals result in a loss for the year. This is beneficial on your taxes. However, can you and your husband put in more money than you are pulling in from the property? Secondly, you have to pay capital gains tax on the sale of a rental property unless you decide to move back into it for 2 years before you sell it. If you do move back into it, you will still have to pay taxes on any amounts taken as depreciation for the years it was used as a rental property. Whether or not you should sell it or rent it is up to you. You may benefit more by renting it and saving up money to pay taxes on the gains. However, you will have to weigh out the differences.

Expert:	TaxMomNJ
Pos. Feedback:	100.0 %
Accepts:
Answered:	11/4/2009

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