Life Insurance

Converting personal residence to rental property ******* Not What It Used to Be: While converting a replacement property acquired in a 1031 exchange from investment or business use to a primary residence is still frequently done, the strategy no longer provides the same benefits as a decade ago. In 1997, a revised Section 121 of the Internal Revenue Code, created a great opportunity for those who owned 1031 replacement property and wanted to convert it to a primary residence. Under the Taxpayer Relief Act of 1997, old Section 121 and Section 1034 were repealed. Old Section 121 provided a once in a lifetime exclusion of up to $125,000 of gain when selling a primary residence as long as at least one spouse was over 55 years of age. Section 1034 allowed the rollover of the gain when selling your primary residence as long as you acquired a new one of greater value within two years of the sale of the old primary residence. The Taxpayer Relief Act of 1991 gave us a new Section 121 wh...