Bought a house as a Primary, now I want to make it an investment

[CalRehabber]

What is the name of your state (only U.S. law)? CA

Hi All,

I recently bought a house as a Primary Residence but after spending a little time there, I now I want to make it as an investment property.

There will be costs incurred renovating, mileage back and forth, etc.

Do I need to change the Title now from Primary Residence to Investment property?

Are there any disadvantages tax wise to leaving it as a Primary?

Thanks..

CalRehabber

 

[tranquility]

If you're not living in the property as your primary residence, it's not. There is no check box to determine what you want, the facts will determine what it is.

If investment.

There will be costs incurred renovating, mileage back and forth, etc.

Items spent before the property is available for rental should probably be capitalized.

Do I need to change the Title now from Primary Residence to Investment property?

Are there any disadvantages tax wise to leaving it as a Primary?

You will never need to change the title.

If the property is your personal residence, you can't take a loss on the sale.

Re-read edit:
I just looked at the OPs user name. In some cases, as was the case in the 90s for house "flippers", at a certain point you are no longer "investing" but running a business.

How many houses have you bought and sold in the last two years?

 

[nextwife]

How long have you owned this house, and was any owner occupied requirement involved in getting the financing?

 

[CalRehabber]

How long have you owned this house, and was any owner occupied requirement involved in getting the financing?

I've owned this property for less than a week so far..

No Financing, I paid cash for it..

 

[CalRehabber]

Thanks for the great info..

This will make 3 Purchased, 1 sold in the last two years..

If you're not living in the property as your primary residence, it's not. There is no check box to determine what you want, the facts will determine what it is.

If investment.
Items spent before the property is available for rental should probably be capitalized.

You will never need to change the title.

If the property is your personal residence, you can't take a loss on the sale.

Re-read edit:
I just looked at the OPs user name. In some cases, as was the case in the 90s for house "flippers", at a certain point you are no longer "investing" but running a business.

How many houses have you bought and sold in the last two years?

 

[nextwife]

Will you actually RESIDE there long enough for it to legally be your primary residence?

.

 

[tranquility]

Our magic number here is 5, but I don't believe that is anything more than a guideline.

It seems as though you are flipping houses and could be considered a "dealer". I don't think you have reached that level yet, but, I'm not the IRS. One bad thing from being a dealer where the buying and selling of property is your business, is that it could change the nature of your income to ordinary income rather than capital gains. A good part is you tend to expense costs rather than add it to the basis and realize them on the sale.