Given the limited information that you have and the following options what would you advise me to do;
1) I need to move out of my home by 6 July and have found a house to rent. I could move into the rental and find another tenant for my jointly owned rental property and simply maintain it as a rental property until ownership is granted to me. At that time I can choose to sell it and pay the taxes to buy a single family home or use the equity to take out cash and use that as a down payment for a single family home or move into it.
2) I can get out of the lease I just signed and hope the realtor is easy on me for the deposit and then move into the marital rental unit. Then after ownership is granted to me I can either stay for two years and use it as a residence without any portion being rented or live in one unit and rent the other unit.
3) If I chose option 2 can I live in the unit for two years and not rent out either unit and then sell it to avoid paying the capital gains tax.
House ownership history is as follows;
1) I purchased in 1983 for $50k
2) I lived in one unit and rented the other starting in 1983
3) Wife moved in in 1985
4) We lived in one unit and rented the other from 1985 to 1992
5) In 1993 both units have been rental units
6) The property was appraised in Nov 2008 for $190k
7) It has been depreciated on all tax returns since 1983.