Orlando Sentinel Ask an Expert column

Feb. 10--Q: My primary residence is in Florida. I have owned and rented a condo in Hawaii since 2004. If I stopped renting the condo and lived in it for half the year, would my condo be considered a second home? Would there be tax consequences? -- Name not provided

A: If you lived in the condo half the year and no longer rented it, it would be a second home. You could deduct any mortgage interest and real estate taxes paid on the condo as part of your itemized deductions. You should maintain the depreciation schedule for your records because when you sell the property, depreciation factors can reduce your cost basis. When you sell a rental property at a loss, you can deduct the loss. When you sell a second home, the loss is considered personal and is not deductible. In both cases, a gain on the sale would be taxable. -- Paula Taylor

Q: My children either own or are beneficiaries of all my assets. Do I need a will or trust? -- R.W., Davenport

A: These assets will bypass probate and transfer to them without a will or trust. However, probate may be desirable even when there are no probate assets because creditors rights to stake a claim against your estate terminate at the closure of the probate estate. Keep in mind you will lose any step-up in basis on the assets if children own them at your passing. -- Matt Giles

Have a question? E-mail askanexpert@fpafla.com. Include your name (only your initials will be printed), hometown and phone. Questions are answered by Certified Financial Planners from Financial Planning Association of Central Florida. Answers are for educational purposes only; you should also consult a financial professional. Questions and answers may be edited for space considerations.

___

(c)2017 The Orlando Sentinel (Orlando, Fla.)

Visit The Orlando Sentinel (Orlando, Fla.) at www.OrlandoSentinel.com

Distributed by Tribune Content Agency, LLC.