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Old 09-14-2015, 12:01 PM
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Conversion of rental property to non-rentalm second home

We have a property in Florida would normally qualify as a second home (primary residence is Michigan). It was rented until November of 2012, then treated as second home in 2013, 2014 and 2015. We sold the home in March, 2015. For our tax returns for 2012, we neglected to indicate that the property was converted to second home; for 2013, and 2014 we no longer filed a Schedule E for the rental property, but did deduct property taxes and mortgage interest. How do we handle sale of the home in 2015 from a tax standpoint? Can we handle it as sale of second home (it's will be a loss), or do we have to handle it as sale of rental property, with depreciation, etc.?



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Old 09-14-2015, 04:00 PM
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Originally Posted by cobratom2015 View Post
We have a property in Florida would normally qualify as a second home (primary residence is Michigan). It was rented until November of 2012, then treated as second home in 2013, 2014 and 2015. We sold the home in March, 2015. For our tax returns for 2012, we neglected to indicate that the property was converted to second home; for 2013, and 2014 we no longer filed a Schedule E for the rental property, but did deduct property taxes and mortgage interest. How do we handle sale of the home in 2015 from a tax standpoint? Can we handle it as sale of second home (it's will be a loss), or do we have to handle it as sale of rental property, with depreciation, etc.?
We have a property in Florida would normally qualify as a second home (primary residence is Michigan). It was rented until November of 2012, then treated as second home in 2013, 2014 and 2015. We sold the home in March, 2015. For our tax returns for 2012, we neglected to indicate that the property was converted to second home; for 2013, and 2014 we no longer filed a Schedule E for the rental property, but did deduct property taxes and mortgage interest.=========>>you do not need to amend your 2013-14 returns as you could still deduct your mort/ pty taxes aslongas you itemized deductions on your Sch A of 1040 so no problem; interest on the mortgage is deductible just as interest on the mortgage on your first home is.



How do we handle sale of the home in 2015 from a tax standpoint? Can we handle it as sale of second home (it's will be a loss), or do we have to handle it as sale of rental property, with depreciation, etc.?====>on the sale of the second home used to be rental home before, you must recapture sec 1250 depreciation taken previously as ordinary income taxed at 25% aslongas your tax bracket is 25% or higher .if your marginal tax rate is 15% then tax rate’d be 15 % or so on.



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Old 09-14-2015, 04:24 PM
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Conversion of rental property to non-rental second home

Thanks for the reply. Sounds easy enough to handle. Appreciate the help



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