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Capital gains/renting out property
I currently own a townhouse in MD and have lived there for the last 14 months. I would like to keep the property to rent out for the next few years and rent a home closer to my job in the meantime. (I plan on moving out of state in the next 3 years or so, so I don't want to buy another property). Would I will have to pay capital gains tax when I sell the house in a few years? What information do you have (or where can I find it) about capital gains and renting out the property? THANK YOU! :D |
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If you rent the property out while you are TRYING TO SELL IT (in order to offset the expense of maintaining two households), you can normally avoid the capital gains requirement.
Based on what you told me, you are in fact converting your townhouse to a rental property. Once that is done, you become liable to pay capital gains taxes on any profit you show when you sell the property. The IRS publishes a Rental Property Guide. You can download it from the IRS website at www.irs.gov. |
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