If you qualify for the exclusion, you may do anything you want with the tax-free proceeds from the sale. You are not required to reinvest the money in another house. But, if you do buy another home, you can qualify for the exclusion again when you sell that house. Indeed, you can use the exclusion any number of times over your lifetime as long as you satisfy the requirements discussed below.
If you’re a homeowner this is the one tax law you need to thoroughly understand.
If you are a savvy real estate investor than you have leveraged the 1031 tax deferred exchange more than once. You are probably at a place in your deferral chain that you owe a decent amount of capital gains and it is keeping you from cashing out. With the TCAC/HCD Opportunity, you can take advantage of capital gains tax breaks by investing in designated Opportunity Zones throughout California. This is a massive break for someone that has had 20+ years of deferred taxes stacking up. There is no way of telling how long this option will be here and if it will come around again.
There are significant tax benefits to being a landlord. As a landlord with rental property, you can take numerous tax deductions on your tax return. Surprisingly, many landlords don’t take advantage of all the tax deductions available to them; usually, because they aren’t aware of them, or they don’t think they’re entitled. The list below of allowable landlord tax deductions should help you take full advantage of your position as a rental property owner.
