Hello All,

I have a client who is receiving $37,000 ($5,000 in 2022 + $ 28,000 in 2023) for buyout by landlord of her apartment lease. Per Stotis v. Commissioner I am treating as sale of a capital asset.

1) How do I handle the related legal or moving expenses? Can these be recovered/included and do I just add to her $0 basis?

2) Is the ST or LT aspect of the gain determined by the date she entered into the lease through termination date (date landlord sells the property) or date she vacates the property?

Thanks all for your help!