HOME SALE

[AMERICATAX2]

I have a couple who file their taxes together (MFJ).

They bought their first house in Sep/2015, for the amount of $310,000.00 and they sold it in Jan/2019, for the amount of $405,000.00. Selling expenses and closing cost were $16,000.00. This sale wasn't reported in their 2019 Income Taxes.

They bought their second home in Nov/2019, for the amount of $474,900.00. they gave a down payment of $70,000.00. This second property was sold on March/26/2021, for the amount of $585,500.00. The selling expenses and closing cost were $26,500.00

Question #1 Do they qualify to take the $500,000.00 exclusion?

Question #2 What other expenses can be declare on line 4 of the Home Sale Worksheet?

(Home Sale Worksheet) Line 4.- What does Seller Paid Loan Fees Mean?

[IRonMaN]

Based on your timeline, they are a little short on the required 2 years so no exclusion.

[TaxGuyBill]

Why did the move out of the second home?  There are some reasons that may qualify them to use the exclusion even if they did not live there for two full years.

[Just-Lisa-Now-]

"....sold it in Jan/2019, for the amount of $405,000.00.....This sale wasn't reported in their 2019 Income Taxes."

They should be seeing that CP2000 for the 1099S from the 2019 sale show up anytime now.

[Norman2001 · Accepted solution]

Question #2 What other expenses can be declare on line 4 of the Home Sale Worksheet?

Did they make any improvements to the house?  New roof, gutters, flooring, etc?

[qbteachmt]

"Do they qualify to take the $500,000.00 exclusion?"

They don't have a gain of $500,000 in either sale. Perhaps what you meant to ask is, do they qualify to exclude any gain from the sale of a primary residence, and if so, which sale? It isn't "a max credit."

[AMERICATAX2]

For sure that is going to happened...!

[AMERICATAX2]

Thank you Lisa 

[AMERICATAX2]

Yes they did. I will include the amount as well.

Thank You so much.