Does anyone know if I should sell my 2nd home?

There are lots of complex matters here. You should talk with a tax accountant for advice. The complications are:

Good news:

1. If you lived in it for 2 out of the last 5 years, you can exclude up to $250,000 in gains from taxes.

2. If you received it as a gift, your basis for the taxable gain should be the value it had on the date it was given to you.

3. Since you have this as rental property, you might be able to do a 1031 exchange to defer taxes on the sale, but need a very skilled realtor to do this.

4. Closing costs are a deductible expense if you are selling this and have a gain on the sale.

Bad news:

5. If you are renting it out and claiming a deduction for depreciation on your taxes, you will have to recapture the depreciation and pay taxes on it, which could be substantial.

6. The tax on capital gains is 15%, not 10%, but the tax on recaptured depreciation is whatever your marginal tax rate is.

Talk with a tax accountant and spell out your ideas. Also, if you are at all close on the ability to say you lived there for two out of five years, try to move back in and get that qualification. The tax savings are huge!

first of all you need to determine the basis of this property when you were given it by your father

the market value is not your 'cost' when you sell it, and it is not what he paid for it

the portion of the property that is was your home is eligible for the exemption for sale of a residence, the portion of time that is was used as a rental will be capital gains and you have to recapture the depreciation on the rental portion

buying a part time residence? how much of the time would you use it? if property prices are low at this time,it probably is a good time to buy, for eventually prices will go back up

First, folks need to construct the residence, then there are folks who guide in promoting the residence (adding identify corporations, the folks who print the varieties, the folks who list the deeds, and many others.). Then, as soon as any person movements in, they want utilities mounted, might be a landscaper or pool contractor. If their youngsters pass to institution, they want academics. The citizens have to purchase meals, open an account at a financial institution, get their hair reduce, might be pass out to dinner each as soon as in awhile or to a film... Overall, it takes two, forty-hour every week jobs in whole to help the citizens in a single residence (considering that you would spend five mins together with your financial institution teller, two mins with the man on the counter, one million minute processing your software fee, 20 mins together with your waitress, an hour together with your hair stylist, and many others.). And the opposite humorous statistic - two parking areas in that town as good (they pass to paintings, store, pass to parties, and many others.) I appreciate your factor that they possibly relocating from one finish of a the town to a further, however sincerely, our populace is developing, consequently the rationale for constructing extra properties. Some of the ones folks are leaving their father and mother properties to get properties in their possess, and a few are immigrants. Others many be relocating from a further state! That state could then be wasting two jobs.

Only u know that answer.