Client sold her main home for $600,000 12/2022
Her husband passed in 2021 so she only gets the $250,000 exclusion not $500,000
Purchased for $125,000 1/2000
66% of the home is a rental on the sch E. There is a cottage/apt/home
There are only 2 things depreciated:
Home improvements 01/01/2010 27.5/40 years $12,750
Rental furnishings 01/01/2009 5/9 years $5,000
$464 deprecation a year
There is no like kind exchange. 66% is an income producing property. apt $9,600 a year. Cottage $8,400 a year.
How do I report this home sale? What do I do about the rental? Do I just do the home sale worksheet?
If we could please just keep the comments to helping comments that would be great. If not, please just pass the post. I'd like to get this return done tonight because this lady is 81-year-old has almost a 2-hour drive here. She is spending the night at her friends down here and after she is leaving tomorrow and moving to a different state at the end of the month. Obviously, I can mail it, but I'd like to be accommodating and get it done tonight for tomorrow morning pick up.
I really appreciate the help. Thank you
Where in your facts are you factoring in the step up in basis after the husband died?
And as a side note, beggars can't be choosers. You come here several times a day with questions, so you really shouldn't lecture people on what types of comments they should or shouldn't make. If you want only "helping comments" you really need to find someone local to help you and pay them for their time.
@MGC94 wrote:
Client sold her main home for $600,000 12/2022
Her husband passed in 2021 so she only gets the $250,000 exclusion not $500,000
There are only 2 things depreciated:
Home improvements 01/01/2010 27.5/40 years $12,750
Rental furnishings 01/01/2009 5/9 years $5,000
$464 deprecation a year
If I'm reading things correctly, it is not something you'll get done today.
1) $600,000 is for the entire building, right? 1/3 her home and 2/3 rental, right?
2a) What was the Fair Market Value on the date of he husband's death?
2b) Is this in a Community Property State?
3) So there is no depreciation on the original building itself? That could be a problem (depending on your answer to #2b). Have you looked at the two years (2000 and 2001) to check if there was no depreciation taken on the original building itself? If not, you may need to get a copy of those two years and look (again, depending on your answer to #2b). Depending on the answers, you may need to file Form 3115 to 'catch up' on the depreciation, which isn't necessarily an easy task.
"Her husband passed in 2021 so she only gets the $250,000 exclusion not $500,000 "
There's a special rule for widowed persons who sell within a certain amount of time after death.
Read.
Sorry if that's not helpful. 😛
<<Her husband passed in 2021 so she only gets the $250,000 exclusion not $500,000 >>
This is not true.
See sjrcpa answer.
37 minutes have already passed. Are you still trying to complete this in record time?
@MGC94 …”If we could please just keep the comments to helping comments that would be great. If not, please just pass the post”.…
sorry Conway, that’s not how it works…. You already stated that you like coming here for other people’s research…. And you don’t even check Google for some pretty basic stuff….
i checked through a bunch of your posts… all about your questions… couldn’t seem to find one where you actually tried to help someone else… that’s what we do here.. help others and get help when we need it…it’s a 2 way street… so if you want to accept help you may also have to accept other people’s opinions, snarkinous (if that’s a word) and comments
i find it laughable that you try to put deadlines on volunteers
"Her husband passed in 2021 so she only gets the $250,000 exclusion not $500,000"
Two Years from date of death. Compare DOD and Sale Date.
"Purchased for $125,000"
Well, it would have been:
$600,000 minus basis (orig cost + improvements), so you would clearly be under $500k. But now, you have more work to do, since this is a mixed use property.
"If we could please just keep the comments to helping comments that would be great."
Here is Help: stop expecting everyone to drop their work to do yours for you. Once again, you are taxing the patience of those who took sympathy when you took over mom-mom's practice, and hadn't already gotten grounded in the Tax Regulations that apply to doing the work at this level.
Now you should see how much you need to be mentored, not over the internet, but someone in person (as you expressed is a method you like). You need to be able to know what every part of this will be, and to show your work, for your own professional status. You are signing these returns, for goodness sake! Have you no pride or shame?
"I'd like to get this return done tonight because this lady is 81-year-old has almost a 2-hour drive here."
Some people on the internet have already ended their work day. We all have differing time zones. No one here is an Intuit employee, unless you see Intuit by their username. No one here is at your beck and call or paid to "stand by to take your call."
You cannot ask to be helped the way you have begged for it, and then get mad when we want to politely draw a line in the sand for what you should expect from peer volunteers.
"2. FMV $600,000"
Pretty much meaningless in the light of an Actual Sale.
Let me just point out, that telling us it had a $600k market value on date of death, not only DOD from 2 years ago, but the weirdest 2 years in the history of US real estate, makes me think you need to pass this on, quickly.
1) So it sounds like she sold her main home for $200,000 and sold the rental for $400,000.
2) Fair Market Value on the husband's date of death in 2021 was the same as the selling price in December 2022?
4) You will need to see the 2000 and 2001 tax returns to see if depreciation was taken on the building in those two years. If depreciation was not taken those two years, you need Form 3115 to "catch up" on the depreciation, and that Form takes some time to learn how to do it, and more time to actually prepare.
There is a 50% step-up in Basis on the date of death, so you will need to factor that in for the depreciation in 2021 and 2022, as well as for the sale of the rental.
This isn't a particularly easy return if you don't have experience with those things, so you may consider passing this one to somebody that has done these things.
"I will know remember that for the rest of my life"
Until the regulations are changed, again. That's why you need ongoing training and reviews.
"All I am asking is skip the post if you can't say anything nice."
Stop it! Everything we say is nice. All of us are expressing our concern for you, professionally. All you have done is whine about the personal situation your loss of mom-mom put you into. You are not even taking your client taxpayers' returns into consideration for these basic things you've expressed a lack of understanding in, in addition to these more complex situations like this one you are now working on.
"As stated before I have been hired by intuit."
Wow. I have to confess I didn't see that; but I don't check every topic that is posted. Well, then. I guess we no longer need to help you. Intuit can give you all the training you need.
"We have over 1,000 accounts."
And it seems like you have asked questions on half of them so far.
The folks here have helped a lot of folks over the years, including you numerous times in the last year. But keep in mind, this isn't 911. Don't phone in every time you think a fire could be starting. Just because it gets a little warm in your office doesn't mean it's on fire. The frustration coming from folks that you are calling meanies, is the apparent lack to help yourself. Spend some time trying to find answers yourself. We don't have every possible tax situation memorized so we don't know everything there is to know about taxes. But we try to figure things out for ourselves. We don't post a question here as soon as a question pops into our head. I'm guessing we have all posted questions here but only as a last resort when we don't know where else to turn. Also, many times when folks have provided help to you, you have challenged that help. Eventually folks here are going to get exhausted from constantly holding your hand, then what are you going to do when a real issue pops up?
Conwaytax94 says "Only thing left in our hometime is H&R block and they have made plenty of mistakes. Even when I ask them questions they do not know
Ever think maybe they knew the answer but didn't feel the need to help you. If you've called them for help as much as you've posted on this forum...... well you probably know what I'm thinking.
Conwaytax94 says "As stated before I have been hired by intuit."
Hired to do what !!! ???? !!!!
@IRonMaN @dkh @qbteachmt @TaxGuyBill @BobKamman and others who have replied to this post. I think this is what most of us do when we have a question: First we try to remember if we have had this issue in the past and go to that client's file to find the answer. If that doesn't work then we take a look at our tax reference material like quickfinder, taxbook, U.S. master tax guide, Etc. If that still doesn't work then maybe in our CPE material from seminars or webinars we can find the answer or maybe we call a colleague who can help us. And then of course Google can always be our friend. After all of that, if we can't find the answer then we post on this forum. If we are helped by colleagues here on this forum then we give them the thumbs up and thank him or her. This is my experience and what I like to do.
If we could please just keep the comments to helping comments that would be great
Seriously???? I'm speechless.
Your chutzpah is amazing.
Have you ever heard the one about "you get what you pay for"?
it is very clear in the IRS instructions
Snarkiness is a noun. : sarcastic, impertinent, or irreverent in tone or manner.
Snarkinous is the adjectival version of snarkiness.
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