Greetings,
I am active duty US military and own a condo in Virginia which I purchased and resided in as primary residence from 2000-2005, rented from 2005-2009 while transfered overseas (depreciated under MACRS) and moved back into as primary residence from 2009-2012 while stationed back in Virginia. I started renting it again this spring after being stationed in California where I am now. I had/have property management but I approve new tenants, determine rental terms and approve expenditures, so I consider it active participation.
Firstly, how do I compute MACRS now?
Do I continue the schedule from where I left off when I stopped renting the property in 2009? Or do I start over from scratch with the current 2012 tax value.
Also where does the Military Family Tax Relief Act of 2003 fit in since I was transfered over 50 miles away under orders. I bought it for 72k and the current tax value is 147k. I understand that capital gains under 250k should be tax free but I am unclear as to how/where the depreciation is factored and how the property being a rental affects it legally should I decide to sell in the future.
Many Thanks!