hello, so i understand that if the house is my main home for 2yrs out of a 5 yr window i am able to have up to a 250,000 gain not reportable unless their is depriactaion if i rent, but does there have to be depriation, if it is only for a year and a half(18 mos at the most) and i only receive enough to pay the mortgage due-no extra profit- i dont need to recoupe the money for paint and things like that, i just want to rent it out for a few months and then sale, can i do this without having to report that i rented it out for that time period?
Estate Planning Attorney
Tyler makes a very good point - you’re going to be treated as having depreciated the property even if you don’t claim the deduction on your tax return so you may as well take the deduction. Also, note that only the interest portion of your mortgage payment is deductible so you may need the depreciation deduction to offset the income. Other deductions to keep in mind are insurance, real estate taxes, and repairs.
If you rent out your primary residence you need to report the income, whether or not you had a gain or a loss on the rental income. Also, you should take the depreciation deduction since the depreciation will be taxable on upon the sale whether or not the expense is actually taken.
Yes, you have to report the rent as income. I think you are confusing capital gains tax with ordinary income.
The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author (who is only admitted to practice law in the State of California). For specific advice about your particular situation, consult your own attorney.