Property sale no 1031

[judys3]

A friend of mine used another preparer. This preparer told them because they sold land and bought a home within the 180 day period they were fine on taxes. They did not do a 1031 exchange.
Everything I’ve read and know of they didn’t do the 1031 they have to pay taxes on the land sale - basis. Correct?

[IRonMaN]

Hopefully that preparer works for free since he shouldn’t be paid for giving that terrible advice.

[judys3]

When someone comes to you for advice and they don’t take it and go else where it’s kinda funny but not. I do feel bad for them. Now I get to help them correct after they’ve received letter from IRS

[IRonMaN]

If a 1099 was generated they will get a notice.  If not, they might have gotten away with it.

[judys3]

Exactly what I told her.  I'm waiting to see the letter.

[qbteachmt]

"and bought a home within the 180 day period"

I'm guessing that other preparer is pretty old. That rule changed in the mid-1990s. Primary residence doesn't qualify for exchange. Now the regulations offer the exclusion of gain on a residence.

[judys3]

I will have to ask!  I never thought about that.  I know for the 1031 exchange you have 180days and thought that's where she got her information.  My friend has yet to come in so I am still curious!

[judys3]

Update.  She can not get in touch with the old preparer and they did receive a 1099.  I've let her know I can help her straighten this out if she will just come in.  Lesson learned.

[IRonMaN]

They had 180 days to buy a house and 18 days to get back to him before he disappears 😁

[judys3]

🤣............run forrest run!

[Taxprohere]

I'm guessing that other preparer is pretty old.

In the sense the old preparer remembers the pre-1997 (edit) rules, though that had a 730-day new purchase period, I hope not that old preparers are not learning new tax laws 😨. 

adding: commenting not on the land sale, just on old preparers!

[sjrcpa]

But selling land wouldn't have qualified. 

[rcooley25]

He does not get any fire ball either

[abctax55]

Susan, excellent point. It was never 'land' to home..... even way back then 😉