Quote:
Originally Posted by Red
How does that help him pay for the new place?
To quote Seinfeld about Kramer:
"it's easy to not pay income taxes when you have no income"
In the end I think you just re-confirmed what I told CS. Renting the condo out will not help you much, if at all.
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Well, in that scenario, you still end up with $3,000 in real cash, that can be put towards the house. If he's moving in with his gf anyways, and they can support it, I'd argue it's worthwhile to rent it out. You're basically getting someone else to gradually pay off your mortgage.
Yes, you have to pay capital gains on the property, but that's from the date the property is declared a rental property, not at the date the condo was bought. Besides, if in fact you have to pay capital gains, that means you came out ahead on the property. I joke with my friends all the time, I wish I was able to pay half a million in capital gains. That would mean I made a killing that year in taxable income.