Harlan Lunsford <hlunsford[at]bellsouth.net> wrote:

- quote -

And fruit flies like a banana.

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

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- quote -

Ah yes; 1997 versus 1993. But as "they" say,
"Time flies when you're having fun."

Are we having fun yet? (grin)

ChEAr$,
Harlan

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- quote -

Harlan, I agree with you, Honey. It was May 6, 1997 when it
changed from the old form 2119 to not even reporting selling
house unless it was to profit you over $500K and $250K.
Fixup expenses were reported on line 16 of form 2119.

Missy Doyle

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- quote -

I remember that the "big change" occurred in May 1997,
Harlan.

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- quote -

Yep, that's how I remember. I actually paid taxes on sale
of two different houses -- in 1971 and 1977 -- using those
rules, and had a small amount of "fixup" to deduct in one
case.

I think the big change was as noted earlier, in 1997.
Because I still have a thick file on my former abode which I
sold in 1990, before moving to FL and building a new home
that same year, for which I "rolled" the cost basis into my
present house ... and that makes where I live a really cheap
home (at least in cost basis).

Bill

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- quote -

My memory's not as good as it once was, but then, whose is?
Anyway.

I "seem to remember" that before the big change back about ...
1993? when Congress raised the threshold to 250,000$ gain
causing no reporting even to be required, that 1. if the gain
were rolled over, then fixing up costs went by the board, but
2. if gain was taxable, then fixing up costs within the 90 days
were allowable as reductions in sale price. Or something like
that.

Anyone else remember?

ChEAr$,
Harlan Lunsford, EA n LA
Mon Jul 10, 2006

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- quote -

<snip
- quote -


<snip> Cost typically
- quote -

You didn't misunderstand, but the article you mention is
wrong. These expenses are not and have never been expenses
of sale which reduce gain. The pre-1997 rollover rules for
deferring gain did allow such expenses in determining the
minimum cost of the new property, but even then they didn't
affect the gain/loss calculation.

--
Phil Marti
Clarksburg, MD

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- quote -

I may have misunderstood. This is what I'm reading:
http://realtytimes.com/rtcpages/20060111_taxbreaks.htm

Section "Selling Costs and Capital Improvements"
"When you sell your home, you can reduce your taxable
capital gain by the amount of your selling costs, which
include real estate commissions, title insurance, legal
fees, advertising and inspection fees. Cost typically
stemming from decorating or repairs -- painting,
wallpapering, planting flowers, maintenance, and the like --
are also selling costs if you complete them within 90 days
of your sale and with the intention of making the home more
saleable."

What I misunderstood is that these costs are not deductible,
but can be used to reduce the capital gain. When I first
read this I didn't understand the distinction between the
two. The question I have is.. what *is* our gain? Is it
simply the sale price minus the purchase price? Or is it
more complicated than that?

Scott

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- quote -

If it turns out you need to report the sale... Selling
expenses are used to calculate the net sellling price of
your home. That information and more are at this link.
http://www.irs.gov/publications/p523/ar02.html#d0e573

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Scott Lindner wrote:

- quote -

Scott, the rule is you may keep any profit from selling your
home to the limit of $500K if you are married filing
jointly. If you have more than the $500K profit ( purchase
price minus any large improvments - new roof, new furnace,
added room, large remodling,etc. - then you subtract the
cost of selling your home on schedule D. The timeframe is
90 days (haven't looked this up lately), for you to take off
the cost of repairs, painting, etc. You may also take the
realestate costs,etc. off of the selling price. If you fall
into the $500K proftit catagory, you do not even need to
report the sale of the home.

Missy Doyle

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Scott Lindner wrote:

- quote -

Capital improvements are added to your cost basis - not
deducted. Fix up and maintenance costs (paint, landscape
spruce up, etc) are NOT added to basis and not deducted.
They are a personal expense of the homeowner and the fact
that you are selling doesn't change that.

Other selling costs could include advertising and,
generally, the substantial fee paid to the real estate
agent. Some other closing costs charged by the escrow agent
and county officials would also be costs of sale.

Of course, if you and your spouse have owned and occupied
the house as your principal residence a minimum of two of
the five years prior to sale, you can EXCLUDE up to $500,000
of the gain. If this applies to you, the above concerns may
be moot.

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"Scott Lindner" <noemail[at]nospam.com> wrote:

- quote -

You misunderstand. Fixing up expenses never have been
deductible. In fact, none of your selling expenses is
deductible per se.

You can exclude a sizeable chunk of capital gain if you meet
the requirements. See IRS Publication 523 for information
on computing your gain and the exclusion.

--
Phil Marti
Clarksburg, MD

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We're in the process of selling our home. I understand that
any improvemnts made to the home within some timeframe
before selling can be deducted. The intent being they are
costs to sell the home. What other costs associated with
selling the home are deductible?

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