Home Sale

[MGC94]

Main home 122 Carolina

2nd home 124 Carolina 

2nd home was a $40,000 next door to main home and was a fixer upper place. 

124 sold for $262,900 

repairs $56,00 in 2016 and repairs in 2021 $84,000

Anyway, around this capital gain? can I use main home exclusion. This was never a rental property. More just for fun to fix up 

[Just-Lisa-Now-]

no main home exclusion unless they used it as a main home for 24 out of the last 60 months....sounds like a taxable sale of a second home to me.

[MGC94]

since they had a 1095-A instead of being taxed $943 they owe $5000. Any suggestions 

[sjrcpa]

Hope they saved some of the sale proceeds.

You can remind them that when they signed up on the exchange they were informed they had to notify the exchange if their income changed.

[qbteachmt]

I did some quick math.

"This was never a rental property. More just for fun to fix up"

I think they are "being paid" (come out ahead) over $65k net, for having that fun.

[Just-Lisa-Now-]

They'll have to cry a little while they write the check...that marketplace health insurance slams lots of people in these kinds of situations...even if they had called and told them their income had changed, they still would have had payback from the months before they called with the income change, as well as higher insurance premiums the remainder of the year.

[qbteachmt]

I don't know enough details to offer this, most likely, but...

Flipping property can be Schedule C as income, not capital gains, under some circumstances. That would mean self-employed health insurance deduction comes into play.

Just thinking out loud, here...