Tax Reduction Letter - Taxes You Pay When You Convert Your Rental Property to Your Principal Residence

Article Date:

June 2012

Word Count:

555

Taxes You Pay When You Convert Your Rental Property to Your Principal Residence

Question

I bought a rental property three years ago and have been renting it out ever since. If I move into the rental home now and live in it for two years and then sell it, will I qualify for the full $250,000 home sale exclusion? (J.T., Bloomington, Ind.)

Answer

Yes, but that’s the wrong question. The proper question is: how much of my gain will be taxable if I convert a rental property to my principal residence?

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