Sale of Main Home that was Partially Rented (and only partially owned)

Forum|Forum|5 years ago
April 25, 2021
1 reply
11 views

Client sold main home that she lived in for over 2 of the last 5 years. She owned 33% of the home. AND 50% of the entire home was rental.

I have it set up so that 16.67% of the home is being depreciated (33% ownership * 50% business use) and the same 16.67% of the sales price is being used to calculate gain on 4797. This results in a $13k gain.

How do I account for the sale of the portion of the home used as her main home? Do I just use the same 16.67% (33% ownership * 50% personal use) to allocate sale price, selling expenses and adjusted basis on the 'Home Sale Worksheet'. And then from there, answer all the questions in Part II in order to exclude up to $250k in gains. And since this 16.67% was all personal use, no need to worry about 'Nonqualified Use" Part III?

ProSeries Professional

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T

TaxGuyBill

Level 15

@jim5917 wrote:

Client sold main home that she lived in for over 2 of the last 5 years.

She owned 33% of the home. AND 50% of the entire home was rental.

Was it her main home the entire time she owned it? If not, give details.

Was the rental portion part of the same home? Or was it a separate 'unit' (separate entrance, separate kitchen, etc.)?

J

jim5917Author

Level 3

Yes, main home the entire time she owned it.

Rental portion was part of the main home. No separate unit. All shared.

T

TaxGuyBill

Level 15

I would forget the Asset Entry Worksheet and only use the Home Sale Worksheet (only enter the disposition date on the Asset Entry Worksheet and leave the sale price BLANK).

I would enter HER Basis and Sales Price (1/3 of the total amount) on the Home Sale Worksheet, and enter the depreciation (I think you also need to factor in the depreciation for when you enter the "Adjusted" Basis).

Yes, leave the "Nonqualified Use" section blank.

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