Discussion:Sale of residence VS rental option
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| Revision as of 02:47, 8 April 2009 Taxes gone wild (Talk | contribs) (So, if you were) ← Previous diff |
Revision as of 03:21, 8 April 2009 Rgtaxservice (Talk | contribs) (Even if the clie) Next diff → |
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| {{ForumReplyPost|UserID=Taxes gone wild|Date=8 April 2009|Text= So, if you were to suggest an avenue to take : would you suggest that this request the taxpayer strongly wants to pursue best be disregarded . He would like me to suggest the best option. Either treat it as an investment property gone bad, no rental: treat as a buy and sell with loss reported on Sch D. OR create a rental property scenario. I am not at all comfortable with either. FYI all these options were suggestd by the taxpayer. }} | {{ForumReplyPost|UserID=Taxes gone wild|Date=8 April 2009|Text= So, if you were to suggest an avenue to take : would you suggest that this request the taxpayer strongly wants to pursue best be disregarded . He would like me to suggest the best option. Either treat it as an investment property gone bad, no rental: treat as a buy and sell with loss reported on Sch D. OR create a rental property scenario. I am not at all comfortable with either. FYI all these options were suggestd by the taxpayer. }} | ||
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| + | {{ForumReplyPost|UserID=Rgtaxservice|Date=8 April 2009|Text=Even if the client did actually have the house for rental (not just pretend), he still would not have a 160K loss. The basis of the 'rental' property would be the lesser of the TPs basis or the FMV. The FMV would be be as of Jan 2008. The FMV would be alot closer to the sales price. There would be little loss of FMV in six months...definately not 160K worth. | ||
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| + | Again, 'saying' it was rental doesn't make it so.}} | ||
Revision as of 03:21, 8 April 2009
Discussion Forum Index --> Basic Tax Questions --> Sale of residence VS rental option
Discussion Forum Index --> Tax Questions --> Sale of residence VS rental option
Taxes gone wild (talk|edits) said: | 7 April 2009 |
| Client bought home in 2005 lived in it prior to purchase ( since 2003) meets residence and ownership test, even if at 2 different times: if I understood Pub correctly. Issue is this client lost about $160,000 on the sale and wants to claim it. Did not live in residence the last year of ownership. Can't claim a loss as investment property if meet residence test. Okay IF makes property available for rental in January of 2008 and sell in July of 2008(so converts to rental in same year as sale) Any special rules on this or any red flags on this conversion. I think he just wants to claim a loss and not able to if meets residence test. Is someone can offer an opionion or some feeed back on this it would be helpful. | |
| 8 April 2009 | |
| Merely making it available as a rental isn't very persuasive. Although applicable to a 1031, some take a conservative approach using the two year period in R.P. 2008-16. | |
Taxes gone wild (talk|edits) said: | 8 April 2009 |
| So, if you were to suggest an avenue to take : would you suggest that this request the taxpayer strongly wants to pursue best be disregarded . He would like me to suggest the best option. Either treat it as an investment property gone bad, no rental: treat as a buy and sell with loss reported on Sch D. OR create a rental property scenario. I am not at all comfortable with either. FYI all these options were suggestd by the taxpayer. | |
Rgtaxservice (talk|edits) said: | 8 April 2009 |
| Even if the client did actually have the house for rental (not just pretend), he still would not have a 160K loss. The basis of the 'rental' property would be the lesser of the TPs basis or the FMV. The FMV would be be as of Jan 2008. The FMV would be alot closer to the sales price. There would be little loss of FMV in six months...definately not 160K worth.
Again, 'saying' it was rental doesn't make it so. | |
