I’m in a truly lucky, and privileged position, to be able to afford and own a house in the Bay Area. A bit part of the reason we bought the house we did was because of the way it was structured. It has three floors, and two entrances, and the bottom floor is essentially set up like an in-law suite, with a private entrance, bedroom, full bath, and a sizable laundry room. We saw an opportunity to augment our income with an Airbnb, and decided to jump into the deep end. (I’ll clarify that, because there’s not really a true kitchen, we’d likely never create a permanent rental unit out of this space).
What about losing the primary residence exemption to capital gains tax ($500,000 for married filing jointly)? Have you moved into whether you could only claim as portion of that exemption, based on your rental?
Great article my friend! I learnt about the depreciation recapture way late in the game, many years after we had moved from San Diego to Bay Area and rented out our primary home. It has been rented for 6 years now and now I am afraid to ever sell it, because of the depreciation recapture. 1031 Exchange can only help, if you want to buy a new rental property. Do you know of any option, to avoid recapture besides 1031 Exchange?
What about losing the primary residence exemption to capital gains tax ($500,000 for married filing jointly)? Have you moved into whether you could only claim as portion of that exemption, based on your rental?
Great article my friend! I learnt about the depreciation recapture way late in the game, many years after we had moved from San Diego to Bay Area and rented out our primary home. It has been rented for 6 years now and now I am afraid to ever sell it, because of the depreciation recapture. 1031 Exchange can only help, if you want to buy a new rental property. Do you know of any option, to avoid recapture besides 1031 Exchange?