Pacun Posted January 16, 2015 Report Share Posted January 16, 2015 (edited) On, December 15th, 2009 client bought a house and used it as his primary residence on the same day. On June 15th, 2012 he moved out and rented the house. He claimed depreciation on the house and on December 15, 2014, he sold the house after being rented for 30 months. Cost of the house: 400K FMV at the time the house was converted to rental 400K. (Meaning that he house didn't increase in price while he lived there) House sold for $845K (Meaning that the price of the house went up while being rented) He changed the roof on the house and it cost him 20K Depreciation allowed or allowable 30K. How much of the gain can he exclude? I have not done any of this using ATX and I would like to know what forms to use and how the gain is reported and where. Thank you to those who are not afraid to give the correct answer and also to the ones who are not afraid to give the wrong answer. Edited January 16, 2015 by Pacun 1 Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted January 16, 2015 Report Share Posted January 16, 2015 Sch D gain $422,500 - $200,000 = $222,500 Personal Residence 4797 gain $422,500 - $200,000 - $20,000 + $30,000 = $232,500 Rental Property Quote Link to comment Share on other sites More sharing options...
Pacun Posted January 16, 2015 Author Report Share Posted January 16, 2015 Sch D gain $422,500 - $200,000 = $222,500 Personal Residence 4797 gain $422,500 - $200,000 - $20,000 + $30,000 = $232,500 Rental Property I think it should be + $20,000 and - $30,000 on the second line. Those are just typos. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted January 16, 2015 Report Share Posted January 16, 2015 I've never had to do this but they came out with new rules a couple years ago to change the calculationn for the exclusion on gain on principal residence when it has been rented and depreciated. Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted January 16, 2015 Report Share Posted January 16, 2015 I think it should be + $20,000 and - $30,000 on the second line. Those are just typos. The adjusted basis is $190,000? Quote Link to comment Share on other sites More sharing options...
Pacun Posted January 16, 2015 Author Report Share Posted January 16, 2015 The adjusted basis is $190,000? You are right. Sorry. Quote Link to comment Share on other sites More sharing options...
Pacun Posted January 17, 2015 Author Report Share Posted January 17, 2015 ILMAS I am glad you noticed that the key here is the disqualified period not the gain period. So, if you own a house for 25 years (and lived in it as your primary home for 23 years) and you rented it for 2 years and you make a profit of $250K, you will be able to exclude $230K regardless of when the gain occurred (provided depreciation was less than 20K). I noticed that you will be disposing two asset in ATX. Is that the only of doing it? I do have a case where I have to disposed of a house (rental and personal) and I am wondering if ATX will do it correctly by disposing only one asset. Thanks. Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted January 17, 2015 Report Share Posted January 17, 2015 I sent you an email with the example replicated in ATX. MAS Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted January 19, 2015 Report Share Posted January 19, 2015 As I understand your question, the only gain would be on the amount of depreciation allowed since he met the 2 year rule. If had split off part of the house as a rental and kept the rest as his residence, then you would report the rental portion separately on 4797. Quote Link to comment Share on other sites More sharing options...
Pacun Posted January 20, 2015 Author Report Share Posted January 20, 2015 (edited) You have to split it based on the regulations after 2006????. So, you have to split them. ILLMAS, wow, you went out of your way to create those forms with entries. Thank you, thank you. Edited January 20, 2015 by Pacun Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted January 20, 2015 Report Share Posted January 20, 2015 You have to split it based on the regulations after 2006????. So, you have to split them. ILLMAS, wow, you went out of your way to create those forms with entries. Thank you, thank you. No problem amigo!! Quote Link to comment Share on other sites More sharing options...
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