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Author: codger41 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121565  
Subject: Personal Residence or Rental? Date: 12/24/2010 9:49 AM
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In June 2007 I bought a house, fixed it up, and rented it out for 2 1/2 years. I moved into the house in January, 2010 and currently live there.
I am considering selling the house. I estimate that I would net $120,000 in a sale, but my cost basis is $160K, so I would experience a loss. I depreciated the house about $12,000 total on my 2007, 2008 and 2009 income tax.

Can I sell the house, claim a loss on the sale ($160,000-$120000=$40,000) deduct the depreciation of $12,000 and take a long term loss of the remaining $28,000?

I guess the question is whether or not the house can be claimed as a rental house and not a personal residence. I know that a loss on a personal residence is not deductible.
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Author: TwoCybers Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111729 of 121565
Subject: Re: Personal Residence or Rental? Date: 12/24/2010 4:53 PM
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Until an expert comes along, start with Publication 527.

It is my understanding there are limits (measured in days) that you can live in rental property without it changing the tax situation. I want to say 14 days per year - but the number may be wrong and I have no idea what is changed if the number of days exceeds the limit.

Gordon
Atlanta

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