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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15319
Experience:  15years with H & R Block. Divisional leader, Instructor
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I plan to move into a rental property in Oregon I have used

Customer Question

I plan to move into a rental property in Oregon I have used for a rental for 30 years. How long must I have to live there to escape capitol gains? Can I still deduct interest I pay on another home I own that is not a rental?
JA: The Expert will know what to do. Is there anything else the Expert should be aware of?
Customer: I guess I just stop depreciating that rental? Is there any way I should report the change?
Submitted: 9 months ago.
Category: Tax
Expert:  Robin D. replied 9 months ago.

Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

Expert:  Robin D. replied 9 months ago.

If you live in the home as your main home for at least 2 years in the 5 years prior to sell you can then use the IRC 121 to exclude gain (up to $250k if single and $500k if married filing joint).

You can deduct interest on a main home and a second home using Schedule A.

You do need to stop depreciating the property that is no longer rental. You would not file the Schedule E any longer. When you sell the rental you will need to look at DEPRECIATION RECAPTURE. The exclusion of gain under IRC 121 does not cover you for the depreciation amount that you have to count as income when you sell.

Until you sell you need not report any change yet.

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