01-09-2007, 04:19 AM
Two things I can think of off of the top of my head:
While you're renting it out you MUST depreciate it. Even if you don't claim depreciation, Uncle Sam will assume you did (this affects your cost basis of the property).
To claim the $500K, the house must have been your primary residence for two of the past five years prior to the sale - which means you can rent it out for just about three years, but it must be sold before that magic deadline passes http://www.taxguru.org/re/primary.htm
Those are the two major things I can think of at the moment.. (Insert standard disclaimer about how I'm not a tax professional here)
While you're renting it out you MUST depreciate it. Even if you don't claim depreciation, Uncle Sam will assume you did (this affects your cost basis of the property).
To claim the $500K, the house must have been your primary residence for two of the past five years prior to the sale - which means you can rent it out for just about three years, but it must be sold before that magic deadline passes http://www.taxguru.org/re/primary.htm
Those are the two major things I can think of at the moment.. (Insert standard disclaimer about how I'm not a tax professional here)