[quote=HLS]The depreciation ‘benefit’ adjusts your cost basis.
It can cost you eventually OR
You can defer with a 1031 exchange.
It depends on how much tax free gain you have right now but consider this…
All things being equal, if the house next door was exactly the same and for sale at the same price,
you might be better off selling yours with a tax free gain and buying the one next door with the proceeds and establish a higher cost basis and higher depreciation.
Just because you sell doesn’t mean that you cannot buy something else. You may even get a better deal on a different property.
If you have been out of the house for almost 3 years, if the closing drags out for any reason you could lose the opportunity.
A tax free gain is potentially a huge benefit.
**Discuss your plan & strategy with your tax advisor.[/quote]
The sell and rebuy again is a great point I didn’t think about…Sorta like if you can sell a stock and rebuy the same thing, but not pay taxes on the 1st sale, sounds like a no brainer…at least when it comes to stocks.
Course, a house is a lot more work with fees, hassles, differences in properties which makes it so much more work…
