You may or may not be thinking of converting your personal home to a rental property, but if you are, please discuss this with me before you take action.

You likely have some planning opportunities available on this conversion of your home to a rental that can improve the rental profits.

One possible strategy is to create an S corporation and then sell your home to the S corporation, which would then operate as the landlord for the property. With this strategy:

  1. You avoid taxes by using the home-sale profit exclusion of up to $250,000 ($500,000 for joint returns).
  2. You create an increase in your rental property’s depreciable basis that generates an increase in depreciation deductions.