Avoid Capital Gains on Rental Property Sale!

In this video, I talk about how to avoid capital gains tax and depreciation recapture tax on rental properties that you sell. There are two components to taxable gain when you’re talking about selling a business property. Some common ways to avoid capital gains is either by 1031 exchange, hold till death, or taking the section 121 exclusion as a primary residence.
#capgains #rentals
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This video is for entertainment purposes only. The information portrayed in this video should not be considered as tax or legal advice. Consult with your own tax professional and attorney to get proper advice for yourself.
• Avoid Capital Gains on...

[@NguyenCPAs]

How many rentals you got?

[@jimross2101]

9 single-family, 1 duplex.

[@vincentortega4284]

1 single family, and plan the equity to purchase a duplex,or triplex

[@bwillb]

Ryan, Great details. Explained in common terms with straight talk. Thank you so much!

[@veronical.sagastume2466]

Great advice, very thorough. Thank you for the detailed video

[@ZZLZ-cj8tl]

Excellent! Very good information. Five Stars*****.

[@mindyfeldman1091]

Great explanation in words I can totally understand, thank you!!!

[@friscoray2]

Thank you for the great info.

[@susansong343]

Very useful, thank you.

[@stanleymason5837]

Great video

[@binhvong5297]

Hi Ryan, thanks for the great details, very informative! One question: what if you moved out of your primary residence, convert it to a rental, many years later move back in to uses sec. 121. Do you only pay taxes on the depreciation recapture like you mentioned, or do you split the whole profit between the time you lived there and when it was a rented?

[@vinay108322]

Thanks. Good information. Unfortunately nowhere I am finding information on sale of Primary residence in Foreign country especially those who migrated from other countries to US due to the employer moving them here, not used their house back in their home country for a while and now selling it post Green Card processing. Any video coverage on this topic would be highly appreciated

[@marianellamedelius8345]

Thanks for the video. Where in my prior tax returns can I find out I’ve taken advantage of depreciation? I did my taxes in turbo tax and I will sell my rental this year. Thanks!

[@rivertran5138]

To Keith Wallace. My CPA said the same thing like you said " If it was originally a rental, you get a prorated tax exclusion amount based on percentage of years as primary vs total ownership time". Is there a way that Ryan can clarify. Thanks so much for very informative and knowledgeable all video you Ryan has been provided.

[@emmanuelgutierrez8616]

Not sure if I missed it, but everything you mentioned is for when you purchase under a business.

[@lourdesjereza4399]

Very informative video. Thank you. I own a rental property for 10 years now and depreciation was only deducted for 5 years. I think my tax preparer is using turbo tax. I am not ready to sell yet. What should I do now?

[@alexmarks4593]

Thanks for this, I'm confused about the 2 of the last 5 years in regards to a property that did not start as a commercial property. You made this distinction at 11:15 in the vid . So if the first two years are residential and then intermittent use after that and it is sold with the property being lived in 2 of the last 5 years can I still avoid 500K in cap gains married? Also in the years I am a resident would I still depreciate?

[@seattledan]

I experienced the same thing where Turbo Tax didn’t depreciate my rental as well!

[@ernestogomez19]

Hi Ryan very informative video. I too like many here am considering selling my rental however am retired and I heard that the capital gains on this sale could possibly cause my medicare premium to go up for 2 years. Since this is not considered ordinary income how is this possible?

[@jennyli2975]

Hi Ryan. Can you do tax for ca properties?

[@jpowell5529]

Presented very clearly, but I also believed the capital gains would be prorated. Years as rental versus owner occupied. Also what about prior to 2009 …considered “qualifying” even though property a rental

[@ViralRivers]

I am no cpa, but I do believe to get the full 250k/500k tax exclusion, it must have originally been a primary residence. If it was originally a rental, you get a prorated tax exclusion amount based on percentage of years as primary vs total ownership time

[@binhvong5297]

The proration is when the property goes from primary to rental back to primary. Ryan's example is rental directly to primary, i.e. moving into a 1031 exchange after 2yrs, that case you will get the full exclusion. The IRS clarified this in one of their publications. Cheers.

[@steveb5736]

@@binhvong5297 Thank you for your effort, but please state which IRS publication states ability to get full exclusion. I got same impression as Keith above that proration is norm for exclusion of Cap gains. Thank you again.

[@ryanshannon7703]

Excellent information, sir! You are an under recognized knowledgebase of YT!

[@NguyenCPAs]

Thank you for the kind words!

[@NepaliNomad1234]

Wow nice information bro 😎

[@NguyenCPAs]

Thank you!

[@siuivy3827]

Hi Nguyen, pls help, I was sold out my rental property , it has purchase in 2014 $100,000 and 2021 $210000 sold out, the repair cost is $50,000 and depreciation is $3,000/pre yr ,we have no W2 , only day trade stock for investment and we are MFJ tax rate so how to calculate the capital gain? Thanks

[@seattledan]

Great explanation. What about doing a 1031 exchange, I move in and officially pay rent myself for a year and then make it a primary residence? Is this legal? Ultimately, I want to sell my rental and buy and move into my forever home

[@knickemup5117]

I rented my primary residence for the past 5 years and bought a condo for 212k. It's a single family home I bought it for 180k. Sold it for 350k. I stand to make 200k profit after all fees. Do I have to pay capital gains tax on the full 200k or 20k (200k profit minus 180k I paid originally)? Also can I make my condo a rental and do a 1031 exchange. Then to buy another single family home to make my primary? I hope that I explained this properly and that it all makes sense to you. Thank you for any help in advance.

[@ednasalinas8280]

Very clear explanation! I own a rental property under my LLC and will sell it in a few years. To avoid capital gains tax, I plan to move back to this property for 2 years as primary residence. My question: do I have to change the ownership from LLC to my name in the deed in order to claim the exemption? Keep up your good work, I do learn from your videos.

[@jamescrenshaw5097]

I know this does not seem to apply to your facts, but there is another YT video with a plan when you have a primary residence that qualifies for the exemption and you are going to convert to a rental property, designed to preserve the benefit of the exemption for whenever you do sell it. The owner forms an S Corp (or LLC that elects S status) and sells the property at fair value for a note payable over time to the S Corp. Although the note qualifies as an installment sale, the owner elects out of installment method, which causes all the gain to be recognized in the year of sale....and excluded under the primary residence exemption. It also give a basis step-up to the S Corp. The S Corp then uses the rental income it gets to repay the note to the owner. Then when sold later by the S Corp, the gain is based on the basis step-up, so the exclusion is effectively used then to lower the tax upon sale.

[@1mw4tch1ng]

siblings own a house purchased in a days when house prices is at $40K in mid 70s. Now, we are planning to sell and non of the siblings live in it over 5 years but one of the siblings son does. once we sell the property cap gain will be split equally among the siblings. How can I reduce cap gain taxes or not pay taxes on my share of the cap gain? Can I put my share in my existing Roth IRA to prevent cap gain?

[@JC6352]

So, standard deduction is used to determine capital gains tax bracket? I thought it wasn't used, and it was the total of ordinary and capital gains. I am I wrong or missing something?

[@melhoresprodutos8899]

Hello, very nice information in this vídeo☺. But my question is: If I how Foreigner Investor and I Buy the house for real estate rentals and After One Year I SELL this property ,ok. Well, I saw once that we have several benefits, both in paying less taxes to the IRS in the Lease as a passive gain and also if I sell after 1 year I can have exemption of more than 40,000 dollars per partner of an LLC, that is if I buy a property for let's say 300,000 dollars and I'm going to rent it (it's not for leisure or personal use) and in 15 months I'll sell it and suppose I put the house in an LLC with 5 partners, ok? So in a sale for say 500,000 dollars you would be EXEMPT from paying Capital Gain Taxes to the IRS, because in this case, as it is passive income, the IRS currently grants around 42,000 dollars of Exemption per LLC partner, ok? so it would be 42kx5 LLC PARTNERS = 210K exemption, So a capital gain of 200,000 dollars would be exempt from taxation, right? Is that right or did I miss some information?🤔🙄

[@shorts_luv7634]

How do I reduce what I pay for capital gain.i sold a rental property .I sold for 200,000 .I bought property for 193,000 15 yrs ago.The last time i in a sold my townhone I paid 20,000 last year.my husband and I file jointly. I do not work.my husband makes 100,000 per year.any way to offset what I owe or redu cents what I owe. Thanks so much

[@matt88997]

Hello I just sold my rental and have $100,000 profit ( 15% capital on it) after paying the 15% capital gain tax, will the rest of my profits $85,000 be added to my earn ordinary income and pay taxes again Thanks

[@EvenaGirlCanDoIt]

Cap gains are separate from ordinary income

[@bernadette1128]

What if I lived in a home for 7 years, bought another one and decided to rent the previous one? How can I avoid paying capital gain taxes if I decide to sell in in a couple of years? Is there a way? I've heard scorp works in the situation

[@NguyenCPAs]

If you sell it within 5 years of moving away from it (since you've lived in it for 7 years already) then you should be able to trigger the section 121 exclusion.

[@oske4530]

I’m faced with this same scenario. But seems like there is an exception to that rule if you use the property as a rental?

[@alferrarigolf8554]

This is my exact question too. Were you able to get a definitive answer?

[@terryharvey1109]

What if you sell your rental for less then you paid for it. Is there any taxes you have to pay?

[@NguyenCPAs]

There won't be any capital gains but there might still be depreciation recapture.

[@gilbertwilson9699]

What about the inheritance tax?

[@binhvong5297]

At $22 million dollars for couples, I wouldn't worry about it (but it would be a great problem if you have it.) Cheers.

[@binhvong5297]

Clarification: $22 million exemption with inheritance tax if only more is passed on.

[@rivertran5138]

Hi Ryan, which is city and state your office located ?

[@NguyenCPAs]

Centennial, Colorado

[@velocitytowing9684]

@@NguyenCPAs do you have contact info. I have some issues with my rental property that I want to sell.

[@teresab208]

None of it helps me so far.