Petula wrote:

- quote -

Unexpected multiple births is a valid reason that the IRS
uses as an example for qualifying for the reduced exclusion.

[Remainder deleted as extraneous]

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Victor Roberts <xxx[at]lighting-research.com> wrote:

- quote -

If investment-related Mark Twain quotes are allowed:

October. This is one of the particularly dangerous months to
invest in stocks. Other dangerous months are July, January
September, April, November, May, March, June, December,
August, and February. - Mark Twain

My favorite though is from Will Rogers:

Don't gamble. Take your savings and buy some good stock and
hold it til it goes up, then sell it. If it don't go up,
don't buy it.

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

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Kathryn Morgan" <kathmorgan[at]earthlink.net> wrote:

- quote -

If the moderator will allow a digression ----

"When I was a boy of 14 my father was so ignorant I could
hardly stand to have the old man around. But when I got to
be 21 I was astonished at how much he had learned in seven
years." Mark Twain.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

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"Kathryn Morgan" <kathmorgan[at]earthlink.net> wrote:

- quote -

Suck-up. ;-)

- quote -

Mark Twain said, "When I was a boy of fourteen, my father
was so ignorant I could hardly stand to have the old man
around. But when I got to be twenty-one, I was astonished at
how much he had learned in seven years"

Stu

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- quote -

Seems like you will need the maid even if you buy the house;
or especially if you buy the house.

--
To reply to me directly, remove the CLUTTER from my email address.

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- quote -

Oops - short term! Missed that one.

--
Don EA in Upstate NY

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"Petula" <petula[at]carroway.com> wrote:

- quote -

I agree with Dick. By the time you sell it will probably be
closer to 10 months or so and since you definitely fall
under the "unforeseen circumstances" clause (God Bless you
and your hubby! Triplets!) you should be able to exclude
around $200K (total number of days you owned the house from
closing date to closing date divided by 730 days times
$500K). And don't forget to add those closing costs and
upgrades you paid for since you bought the house to your
$165K basis and the subtract the "fixing up" expenses to
sell and the closing costs on selling from the projected
$360K selling price. That ought to put you well within the
range to exclude the total gain or close enough for you to
sell now and get into the new house while you still can.

Oh, and I also agree with Dick on his other points, get a
maid/au pair to help you keep your sanity even if you do
move. As the Mom of multiples (only twins thank goodness,
but I had a 15 month old when they were born) I know my
Nanny saved my life. And probably my husbands too!

To Dick: From the Mom side of the equation, my big old
"Momma's Boy", who is 23 now still gives me kisses and hugs,
but my "Daddy's girls" still have Daddy wrapped around their
21 year old fingers just as tightly as the day they were
born. And they get over that 13 thing eventually, if you
don't kill them first. My one girl is married now and she
has started discovering that Momma is a lot smarter then she
used to be, imagine that! LOL.

--
Kathy Morgan EA
H & R Block Master Tax Advisor
Proud Mom of Sgt RT Morgan
1/156 AR BN C Company
Louisiana Army National Guard
Baghdad, Iraq

Moderator:
I always appreciate it when people agree with me. Please
be here for the next constructive question - you may be
my only ally. Mike Wing who rarely agrees with Ed Zollars,

Why not post your son's APO address so some of us can thank
him for standing between harm's way and our children.

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Multiple births from the same pregnancy is one of the items
which entitles you to hardship relief (Reg Sec
1.121-3(e)(2)(iii)(E) ) and a partial exemption of your
gain. I believe the exclusion is calculated as follows but,
with a 195k gain you should verify w/ a CPA or perhaps
someone else on this board will confirm.

Maximum Exclusion: 500,000 x 7/24 = 145,833
Gain: 195,000 - 145,833 = 49,167

The 49k would be taxed at your regular tax rates since you
haven't owned it more than 12 mos.

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Petula wrote:

- quote -

See the section in IRS Pub 523 (Home Sales) on page 14 under
Reduced Maximum Exclusion. Even though you fail the 2 year test,
you appear to be able to obtain a partial exclusion of capital
gain due to unforeseen circumstances. Namely, the pending birth
of triplets that makes your home unlivable for a family of five.
There is a worksheet in the Pub where you can compute your
partial capital gain exclusion.

By the time you close on the house, you may find that the partial
exclusion wipes out your gain.

http://www.irs.gov/publications/index.html

--
Alan
http://taxtopics.net

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- quote -

Congratulations!

- quote -

Having triplets (or even twins) is one of the "unforeseen
circumstances" specifically mentioned in Pub 523
http://www.irs.gov/pub/irs-pdf/p523.pdf You will be allowed
a reduced exclusion proportional to the length of time you
lived in the house. For example, if you sold your condo
today, after living in it for only 7 months, you would be
allowed an exclusion of (7/24)*$500,000 = $145,800. You
would pay tax on $49,200 at 15%, or $7,380. Of course it
will take some time to actually close the sale, so your tax
will be less. (This is Federal tax only; your State may also
want something from you.)

--
Don EA in Upstate NY

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The IRS allows for "Extenuating Circumstances" when selling
your residence under the 2 year minimum. In Publication 523,
it specifically lists multiple births from the same
pregnancy as a condition (Unforseen Circumstance) which
allows you to seel the home before the 2 year minimum and
still exclude a portion of the gain. I have pasted the
"Reduced Maximum Exclusion" worksheet for you below. Once
that is worked out then you can figure out the potential tax
hit:

Mark-

Worksheet 3. Reduced Maximum Exclusion

Caution:Complete this worksheet only if you qualify for a
reduced maximum exclusion. (See Reduced Maximum Exclusion .)
Complete column (B) only if you are married filing a joint
return. (A) You (B) Your Spouse 1. Maximum amount 1.
$250,000.00 $250,000.00

2a. Enter the number of days (or months) that you used the
property as a main home during the 5-year period* ending on
the date of sale. (If married filing jointly, fill in
columns (A) and (B))

2a.
b. Enter the number of days (or months) that you owned the
property during the 5-year period* ending on the date of
sale. If you used days on line 2a, you also must use days on
this line and on lines 3 and 5. If you used months on line
2a, you also must use months on this line and on lines 3 and
5. (If married filing jointly and one spouse owned the
property longer than the other spouse, both spouses are
treated as owning the property for the longer period)

b.
c. Enter the smaller of line 2a or 2b c.
3. Have you (or your spouse, if filing jointly) excluded
gain from the sale of another home during the 2-year period
ending on the date of this sale?
NO. Skip line 3 and enter the number of days (or months)
from line 2c on line 4.
YES. Enter the number of days (or months) between the date
of the most recent sale of another home on which you
excluded gain and the date of sale of this home

3.
4. Enter the smaller of line 2c or 3 4.
5. Divide the amount on line 4 by 730 days (or 24 months).
Enter the result as a decimal (rounded to at least 3
places). But do not enter an amount greater than 1.000
5.
6. Multiply the amount on line 1 by the decimal amount on
line 5 6.

7. Add the amounts in columns (A) and (B) of line 6. This
is your reduced maximum exclusion. Enter it here and on
Worksheet 2, line 8

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Petula <petula[at]carroway.com> wrote:

- quote -

While you will not qualify for the full exclusion that
living there 2 years gets you, you can still get the
pro-rated exclusion.

So if you live there 1 year you get 1/2 the full exclusion.

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

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Petula wrote:

- quote -

See IRS Pub 523 http://www.irs.gov/pub/irs-pdf/p523.pdf
The 'unforseen circumstances' may apply here, in which case
the $500K exemption is prorated, and by the time you sell,
you'd have $195 gain covered. The wording is less than
precise, so I'm sure others here will offer
agreement/counter to my observation. Good luck with the new
family!

JoeTaxpayer (at earthlink.net)

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Petula wrote:

- quote -

You're looking at tax on maybe $50,000 of gain (you qualify
for unforseen circumstances, so get an exclusion of 7/24-ish
of $500k). Short-term, so ordinary income tax rates apply.
That could be as bad as 35% + ~10% state, so say $22,000.

Not to be a downer, but with triplets, you have a good
chance of being on bedrest at some point. So if you decide
to move, better sooner than later.

Phoebe

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We bought a condo 7 months ago. Our plan was to have a
child, stay here til the child was two, and buy a house.

I was having difficulty getting pregnant so I took
fertility drugs. I am now five months pregnant with
triplets. My husband said alcohol was a better idea.
I now agree with him.

This building went into rehab over two years ago and
we contracted for this unit at $165,000. The last
available unit sold recently for $360,000.

My unbelievaly considerate husband has 2 alternatives.
1. We stay here til the two years are up and he hires
a maid to help me.
2. We sell, pay the taxes, and buy a house.

How bad will the tax hit be on a $195,000 gain?
If it's bad enough, I may take the maid.

Petula

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