How will the new real estate tax law affect my tax deduction if I rent out my primary home for 1 year?

August 6th, 2010 darlees Posted in Tax Deductions | 1 Comment »

I bought a house in Feb 2009, moved into it for 4 months. Now I’m planning to rent it out for a year. After that, I’ll move back in. After 2 years, if I sell it and make a profit, how will the 1 year rental affect my tax deduction?


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One Response to “How will the new real estate tax law affect my tax deduction if I rent out my primary home for 1 year?”

  1. v b Says:
    August 6th, 2010 at 10:36 am

    1/3rd of the profit can’t be excluded.

    so, you buy for $100,000. It goes up to $150,000. You claim $10,000 of depreciation.

    You can exclude 2/3rds of 50,000. You pay tax at 15% for 1/3rd and ordinary tax (capped at 25%) for the depreciaiton.

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