giogis245 Posted February 8 Report Share Posted February 8 It's been a long week (and it's only Tuesday) and I cannot think straight. TP bought house 3/6/20 and sold it 11/15/21, do I have to report on 8949 and pay taxes on the proceeds? He bought a piece of land and thinks they can write off that purchase, which I have told them they have not as they plan to build a new house. Can you please shed some light. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 8 Report Share Posted February 8 At least it's long-term capital gain. Is their income low enough that they could be in the 0% CG bracket? Otherwise, any chance for an unforeseen circumstance? An expensive lesson to call you BEFORE making any large financial moves. 4 Quote Link to comment Share on other sites More sharing options...
RitaB Posted February 8 Report Share Posted February 8 Just to clarify, they don't pay tax on the proceeds, but on any gain, and yes, report the sale on Form 8949. Correct, you can't reduce the gain by the other property he bought. They all think that; find an article or two that addresses that and print for him. 3 Quote Link to comment Share on other sites More sharing options...
cbslee Posted February 9 Report Share Posted February 9 The reinvestment in a new home strategy died with The Taxpayer Relief Act of 1997. 4 1 Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 9 Report Share Posted February 9 A key question to ask the question is: "Why did you sell the property?" Depending on the answer, you could use the exclusion partially or make the profit fully taxable depending on their income. 4 Quote Link to comment Share on other sites More sharing options...
TexTaxToo Posted February 9 Report Share Posted February 9 Unforseeable event: "The value of the house jumped 30% and we could make a killing!" See Pub. 523 page 6 for the actual allowed "unforseeable events" - having twins is one!! 4 Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted February 9 Report Share Posted February 9 Was the home being improved and was vacant or was it rented until it was sold? Quote Link to comment Share on other sites More sharing options...
mcb39 Posted February 10 Report Share Posted February 10 In today's market, the profit could be huge. I know that I have one of these coming up in a return so I am following this conversation closely. Quote Link to comment Share on other sites More sharing options...
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