Hello and welcome to Moneygirls quick and dirty tips for a richer life.

Today's topic, how to take advantage of the homeowner's tax exclusion as a real estate investor.

In the last episode, I talked about the tax break from Uncle Sam that allows you to sell your

primary home and pay no capital gains tax on up to $500,000 of

gain if you're married filing jointly and up to 250,000 if you're single.

But what about rental properties? Is it possible to apply this

tax break to rentals? Unfortunately the capital gains exclusion does not

apply to rental properties. It applies only to your primary home, but you can turn a rental house you own into your

primary home and by doing so make the sale eligible for the tax exclusion.

If it suits you, you can move into your rental house,

live in it for two or more years,

and then sell it and pay no tax on your gain

if it's under the exclusion limits.

To be eligible for the exclusion you must own and live in the house for two of the previous

five years.

If you own multiple rental houses and are open to an unusual lifestyle, you could repeat the process as frequently as every two years if you want to sell your properties without paying tax on the gain up to the exclusion limits.

Before you sell a rental property be sure you're clear

about your reason for selling and be sure that it's a good reason. Keep in mind

that when you sell a house you're selling an asset that over the long term typically goes up in value.

Your gain when selling a house that has been rented may be higher than you expect.

When you were renting it out, you were most like... may be higher than you expect.

When you were renting it out, you were most likely depreciating the cost of the house on

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