DEAR BENNY: My aunt is 76 years old and lives in her home. She also owns a detached rental property nearby. Her primary residence has been the same property for more than 10 years. She would like to move into a retirement community this year, but to afford this new lifestyle she would have to sell one of her properties soon. Would it be more cost-effective from a tax perspective to sell her primary residence or her rental property? Are there any tax benefits to selling rental property vs. one's primary residence?
I have heard about a one-time tax exemption on the proceeds of selling one's primary residence, but I do not understand the rules of this exemption. I was thinking it would be better to sell the rental property first to avoid inconveniencing my aunt's d