Assume it's November 2021. Your friend, Nick, purchased a house on January 1, 2017, for $300,000 and
Question:
Assume it's November 2021. Your friend, Nick, purchased a house on January 1, 2017, for $300,000 and lived in that house through January 5, 2019, at which point he moved to a bigger house a few blocks away. Since January 14, 2019, Nick has used the house as a rental house. His current tenants will move out of the house by December 31, 2021. Nick has decided she does not want to be a landlord anymore, so he's planning on cleaning up the rental house after the tenants move out and putting the house on the market (to sell it) in February 2022. House prices in the neighborhood have increased rapidly in the past few years and based on comparable houses in the neighborhood, Nick believes he will be able to sell the rental house for around $410,000. Based on the tax rules, what advice would you give Nick about selling that property?
