Discussion:$250K exclusion on sale of principal residence
From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
Discussion Forum Index --> Basic Tax Questions --> $250K exclusion on sale of principal residence
Discussion Forum Index --> Tax Questions --> $250K exclusion on sale of principal residence
| 8 October 2008 | |
| Have a new tax client who sold principal residence in July 07 for about $150,000 gain. Moved here to our state and have no plans to purchase another residence due to potential employment relocation. I am preparing their 2007 return; they meet the requirements for the $250K/$500K exclusion on capital gains tax. My question: is there a schedule or form to be used as part of their 1040 where this should be included? Or is it just not included as a part of the tax return? | |
Seaside CPA (talk|edits) said: | 8 October 2008 |
| Agree with Solomon. Nothing shown on return. | |
WIBadgerCPA (talk|edits) said: | 8 October 2008 |
| Since brokers sometimes report these sales on 1099 forms, I would report the sale on Schedule D, and on the second line of Schedule D, report a Section 121 exclusion for the amount of gain, backing it out of the return. This just avoids IRS matching problems. | |
| 8 October 2008 | |
| Agree with WIBadgerCPA - if the closing attorney/title company/broker issued a 1099-S, it is best to put it on the return. | |
| 8 October 2008 | |
| Thanks Kevin and Badger. No 1099 that I know of; regardless, your suggested route looks like the best way to go. | |
| October 8, 2008 | |
| FYI, this was discussed previously.
And I believe it ended up with opinions on both sides of the fence. I generally report it; seems easier than dealing with a client upset at getting a nastygram from the IRS. | |
Death&Taxes (talk|edits) said: | 8 October 2008 |
| You might look at this discussion which does involve an audit: Discussion: Sale of primary residence | |
| 8 October 2008 | |
Another way to increase the fee, huh?  - especially with no 1099-S.
| |
Seaside CPA (talk|edits) said: | 8 October 2008 |
| A taxpayer can elect to have the gain exlusion rules NOT apply by reporting on Schedule D [IRC Sec. 121(f) & Pub. 523]. Otherwise, I don't report, & so far no correspondence from IRS. | |
To join in on this discussion, you must first
log in.
