Temporarily converting a personal residence to income-producing property.

From: The Tax Adviser | Date: February 1, 1994| Author: Martin, Vernon M., Jr.; Miller, Sandra K. | Copyright information

A personal residence can be converted into rental property, allowing the taxpayer to take advantage of deductions for depreciation and other expenses available for income-producing property. Net income or loss is treated under passive activity rules. If the property is sold while still rental property, the gain is taxable and loss deductible. Tax-free rollovers are not available to the taxpayer but like-kind exchange and involuntary conversion options are. After converting back to personal us...

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