Real Estate Planning

IRC Section 121 and Its Application to a Rental Property Turned Primary Residence

Investing in real estate can provide significant financial benefits, including capital appreciation and rental income. However, the tax implications of selling a property that has been used both as a rental and as a primary residence can be complex. This article will explore how the Internal Revenue Code (IRC) Section 121 exclusion applies when a rental property is converted into a primary residence, focusing on a detailed case study to illustrate the key points.For more on the tax implications of selling rental properties, see Tax Implications of Selling a Rental Property – Gilbert Wealth What is the IRC Section 121 Exclusion?…
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Tax Implications of Selling a Rental Property

Selling a rental property can have significant tax implications, whether you realize a gain or incur a loss. This article will provide a detailed overview of the various tax considerations involved, including depreciation recapture, selling expenses, and passive loss carryforwards. Calculating Real Estate Gains or Losses When you sell a real estate property, or any investment for that matter, you will incur a capital gain or loss. Unless held in a tax-qualified account, the capital gain or loss goes into determining potential tax obligations you may have as a result of the sale. To determine the capital gain or loss on…
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How to Calculate Adjusted Cost Basis for a Rental Property

Investing in a real estate property can be a great source of income and capital appreciation while also providing an owner with a tangible asset to take pride in. As any new owner will soon find out, real estate investing has a number of unique tax benefits and considerations. A key element of this tax planning is determining the Adjusted Cost Basis for a property which impacts the overall taxable gain an owner might have when selling the property.For more on the broader tax implications of selling a real estate property, see Tax Implications of Selling a Rental Property – Gilbert…
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