preparing return where property sold was owner occupied rental. is tax payer allowed sale of personal residence? property a triplex do I use only 2/3 of Selling price on form 4797. First time had a owner occupied rental sold. Would appreciate some directi

[DaisyMae8]

Need some advice on preparing 2021 Tax return where TP lived in property (Triplex) before selling.

Should Selling Expenses and Gross Proceeds be allocated? TP did not receive a 1099s only Settlement

Sheet.

Any help would be appreciated. Read Pub 523 but need more clarification.

Thank you.

EGC

[TaxGuyBill]

It sounds like it is NOT an owner occupied rental.  It sounds like the owner lived in one "dwelling unit" and had two other "dwelling units" for rent.

If all units were equal size and value, then the owner's portion is 1/3 and the rentals are 2/3.  But if they are not equal size or value, then you may need to adjust the percentage allocated to each.

Does that help at all?  If not, please post more details about exactly what you are asking about.

[BobKamman]

And why did he not receive a 1099-S?  Did he lie at closing and sign a form saying it was all his primary residence?  (Sometimes people sign these without reading them.) Or maybe they sent one but they didn't have his new address and the forwarding order expired.  If there ever was one. 

Did he live there 2 out of the last 5 years?  An interesting question would be if it made a difference if he moved from one unit to another.  Glad you didn't ask that.  

The rental portion goes on the 4797, and the personal portion goes on Schedule D, perhaps claiming the Section 121 exclusion.  As @TaxGuyBill points out, the allocation between rental and personal depends on facts and circumstances.  

[sjrcpa]

FYI There probably is a 1099-S. Sellers get them at the settlement table, along with the other thick stack of docs. It's typically 1/2 page. Easy to overlook.

[DaisyMae8]

thank you for your response. Tax Guy Bill

Owner lives on first floor of three story building so it is owner occupied rental property.

My questions are on form 4797 should I include only two thirds of Selling price and two thirds of settlement fees, depreciation and one hundred percent of expenses for rental dwellings. Also is owner entitled to exclusion for sale of personal residence.

[DaisyMae8]

Mr Kamman,

Appreciate your response but it was not necessary to call my client a liar about not receiving 1099-S form.

The Settlement sheet gives Selling price expenses and net proceeds.

[BobKamman]

@sjrcpa Are you calling her client a liar?

[TaxGuyBill]

---

@DaisyMae8 wrote:

thank you for your response. Tax Guy Bill

Owner lives on first floor of three story building so it is owner occupied rental property.

My questions are on form 4797 should I include only two thirds of Selling price and two thirds of settlement fees, depreciation and one hundred percent of expenses for rental dwellings. Also is owner entitled to exclusion for sale of personal residence.

---

I stand by my original answer. 

[sjrcpa]

No. From experience I have had clients tell me they didn't get a 1099-S. Then they get a matching notice from IRS.

I always assume there is a 1099-S now.

[sjrcpa]

@DaisyMae8  It wasn't Bob.

Or maybe it was both of us.

I prefer mistaken.

[DaisyMae8]

It was BobKamMam. who called my client a liar.

This my first time reaching out to community for assistance and it was not a good experience.

Did not except for client to be attacked.

Will not use this again.

[BobKamman]

First time for someone taunting me with some juvenile remake of my name.  Guess it's to be expected from people who choose anonymity.