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Article: Converting a principal residence to rental property.
- Article from:
- The National Public Accountant
- Article date:
- June 1, 1993
- Author:
CopyrightCOPYRIGHT 1993 National Society of Public Accountants. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Homeowners and their tax advisors are familiar with the tax advantages of home ownership. Among the advantages are mortgage interest and property tax expense income tax deductions, tax deferral on the realized capital gain from the sale of a principal residence and the purchase of another residence at a purchase price that exceeds the selling price of the previously owned residence, and the exclusion of up to $125,000 in capital gain for eligible taxpayers 55 years and older at the time of sale.
During the period 1986-1989, homeowners used many of these benefits to their advantage. While the Tax Reform Act of 1986 eliminated or limited many commonly used income tax ...