Discussion:Section 121 repossession
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Discussion Forum Index --> Basic Tax Questions --> Section 121 repossession
Discussion Forum Index --> Tax Questions --> Section 121 repossession
| 4 November 2007 | |
| If you sold your house on installment took the 1212 xclusion the repossesed but did not sell the house within 1 year of repossesion can you do a section 121 again on the same house | |
| 4 November 2007 | |
| as long as the taxpayer mee ts the 24/60 month test, yes. Would help if both spouses are still alive too for max exclusion. | |
| 4 November 2007 | |
| Nshnider, since the home was not resold within one-year of the repossession, the resale will be treated as a second sale. Sec. 1038(e). If the home had been sold within one-year of the repossession, then the second sale would be treated as part of the first sale.
Since the resale will be treated as a second sale, the 2-year occupancy and ownership tests will need to be satisfied for the second sale. | |
| 5 November 2007 | |
| Riley2 do you have to do an amended 1040x if not sold within 1 year of repo since you are no longer taking the 121 and reporting all income on the Sch D | |
| 6 November 2007 | |
| The repossession does not revoke the original Sec. 121 exclusion. However, if you decide to revoke the original 121 exclusion, then you must file a Form 1040X. | |
| 6 November 2007 | |
| Riley2..The problem is if you repo after 3 years and do not sell the house within 1 year of repoyou can't do a 1040x so then what | |
| 6 November 2007 | |
| Dennis I think you are missing my point. if repo is in 5 year or greate you cannot do a 1040x because the return is nolonger open, greater than 3 years so how can you do a 1040x?
Neil | |
| 6 November 2007 | |
| Neil: Repossession in 2006. Year to resell ends in 2007. Amend 2006 to report gain from repossession if house is not sold. Riley's suggestion, if the years are open, would involve amending several years to recognize gain under the installment method. | |
| 6 November 2007 | |
| Neil, as Dennis notes, the gain or loss (if any) from the repo would be reported in the year of the repo. | |
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