My wife bought our current home 5 years before we met. It’s still deeded in her name only. When we move, we want to convert it into a rental.
The problem is this: That house has appreciated by $200k since she bought it, and unless we sell within 3 years of moving out, we will have to pay capital gains taxes on that $200k.
My position on this, is that we should sell it and use the proceeds to buy a different rental so we can reset the tax basis. My wife is vehemently opposed to this and wants to keep it. She remains convinced that there must be a way to avoid the capital gains taxes.
I have an appointment with a tax attorney this week, but my own research says that we either sell within 3 years of moving, or we will owe the taxes when we eventually sell, even if that sale is 15 years from now.