Our office uses Sch D IF the gross sale is over $500,000 or
IF the escrow company used a 1099-S and then show the Sec
121 exclusion. This is just in case someone on the
reception end hasn't heard of the new rules. We hate having
to answer CP 2000 letters two years later....

Nan, EA in LA
Entrenched belief is never altered by the facts.....

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taxservice[at]aol.compliance (John H. Fisher) writes:
- quote -

Does the SoL still start running from the filing of the
return on which you would have reported the sale if the gain
had exceeded $500k? For purposes of deciding the length of
the SoL, would the understatement of income (if any) be
after the exclusion? That is, if you made a mistake in
calculating your basis and it turned out that your gain was
really $501k, would your understatement by not reporting the
transaction be $1k or $501k (or even the full sale price)?
I guess this is a roundabout way of asking how long you need
to keep documentation to substantiate your basis and your
use as a primary residence.

Dan Lanciani
ddl[at]danlan.*com

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"Ray Jenkins" <rayj.balt[at]verizonDELETHIS.net> wrote:

- quote -

More than $500,000? How long has this been your primary
residence?

If less than $500,000 cap gain, been primary residence 2 out
of the past 5 years, no reporting requirement.

- quote -

Age not relevant.

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Ray Jenkins <rayj.balt[at]verizonDELETHIS.net> wrote:

- quote -

The age 55 rule changed in 1997 to a better rule:

If you owned and lived in this home as your main home for at
least two of the 5 years before sale, then you can exclude
the first $500,000 of capital gain from income.

You can repeat this with another main home every 2 years.

If you meet these criteria, and your gain is less than
$500,000, you do not even have to report the sale. If more
than 500,000 of gain, then file form 1040 Schedule D, report
the gain, and on the next line write "Section 121 exclusion
...... $(500,000) and deduct that from the gain.

If you do not receive a Form 1099-S by Feb 1 2005, you can
ignore the sale.

If you do receive a Form 1099-S and gain was under $500,000
the IRS says it;s OK to not report, but to be very safe, you
might think of reporting then excluding the Section 121
amount, up to the amount of gain.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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- quote -

Was your gain more than $500,000?

Carol
It's a cats world. I'm just here to open the cans.

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"Ray Jenkins" <rayj.balt[at]verizonDELETHIS.net> writes:

- quote -

Assuming you owned and occupied the property as your primary
residence for at least two of the past five years, was the
*gain* more than $500,000? If so, you have something to
report.

- quote -

Irrelevant.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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- quote -

If you lived in the home, as your primary residence, for 2
years out of the five years preceding the sale, and your
gain from the sale did not exceed $500,000, NO!!!=

There is a $250,000 exclusion of gain for each of you. Filing jointly, you may
net $500,000 profit without having to report it and without incurring any
federal tax. (This assumes the property was not used for business purposes).

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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Ray Jenkins wrote:

- quote -

Have you OWNED and LIVED IN the home for at least two of the
previous five years?

Was the gain LESS than $500,000?

If the answers to both questions are YES, there is no
reporting requirement on Schedule D (and no tax due). Your
age(s) is not a factor in either reporting the sale or
having a tax requirement.

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"Ray Jenkins" <rayj.balt[at]verizonDELETHIS.net> wrote:

- quote -

Only if you had a profit from the sale in excess of
$500,000. That profit is determined by subtracting the cost
of the house from the sales price. The balance of the
mortgage, if any left, has nothing at all to do with it. If
you have lived in that house any 2 of the past 5 years, you
have this tax break described above. Also, you must file a
married filing joint tax return.

If the profit is greater than that amount, you will report
the sale and resulting profit on a Schedule D to be attached
to your tax return and pay capital gains tax on the profit
from the sale.

Wayne Brasch, CPA, M. S. Taxation

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- quote -

Ray, your age has nothing to do with it. As long as you
have owned the home for 2 out of the past 5 years, never
used it for business and made $500,000 or less in profit,
you will not have to report anything.

Helen, EA in PA
Director, NAEA; Immediate Past President, PSEA; Tax Expert, AOL
Enrolled Agents - THE Tax Professionals

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"Ray Jenkins" <rayj.balt[at]verizonDELETHIS.net> wrote

- quote -

Unfortunately, age isn't a factor anymore. If you lived in
that home as your primary residence for more than two years,
you'll receive a $500,000 gain exclusion ($250,000 for other
than MFJ). Any gains above that amount is taxable
regardless. But, it would be at the capital gains rate
(15%) for long term capital gains, unless you had the house
for less than a year.

--
Snowmen fall from heaven unassembled.
-------------
Paul A. Thomas, CPA
taxman at negia.net

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"Ray Jenkins" <rayj.balt[at]verizonDELETHIS.net> writes:

- quote -

Doesn't matter

- quote -

Maybe. See IRS Publication 523.

Phil Marti
Clarksburg, MD

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My wife and I sold our primary residence this year with a
substantial capital gain.

We are past 55.

Are we required to file any forms reporting this transaction.

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