Do I have to report the reason for capital gain exclusion on sale of primary residency held for < 2


S

Shivani

We moved from one state to another and sold our primary
residency which we had held for 18 months. We moved because
my spouse got a job in another state and my employer
transfered me to that state too. I called IRS and explianed
the situation to them and they told me that since we are
moving because my spouse found a new job (unemployed to
new), we would be exempted from paying the tax on capital
gains. Do I have to report this while filing the taxes?
 
Last edited by a moderator:
P

Phil Marti

Shivani said:
We moved from one state to another and sold our primary
residency which we had held for 18 months. We moved because
my spouse got a job in another state and my employer
transfered me to that state too. I called IRS and explianed
the situation to them and they told me that since we are
moving because my spouse found a new job (unemployed to
new), we would be exempted from paying the tax on capital
gains. Do I have to report this while filing the taxes?
All IRS could have told you from what you told us is that it
sounds like you qualify for the reduced exclusion explained
in Publication 523. If it turns out that your entire gain
is excludable, you report nothing, per the 1040
instructions.
 
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H

Herb Smith

Shivani said:
We moved from one state to another and sold our primary
residency which we had held for 18 months. We moved because
my spouse got a job in another state and my employer
transfered me to that state too. I called IRS and explianed
the situation to them and they told me that since we are
moving because my spouse found a new job (unemployed to
new), we would be exempted from paying the tax on capital
gains. Do I have to report this while filing the taxes?
Since you are requesting a partial exclusion (i.e. up to
$500,000 x 0.75 = $375,000) on your gain, the sale should be
reported on your Schedule D, with an explanatory statement
attached.

If your gain on sale exceeds $375,000, you will owe tax on
the amount in excess (Long Term rate, maximum of 15%).
 
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M

Missy

Shivani said:
We moved from one state to another and sold our primary
residency which we had held for 18 months. We moved because
my spouse got a job in another state and my employer
transfered me to that state too. I called IRS and explianed
the situation to them and they told me that since we are
moving because my spouse found a new job (unemployed to
new), we would be exempted from paying the tax on capital
gains. Do I have to report this while filing the taxes?
The answer is that it is pro-rated. Any good tax preparer
will be able to handle this problem.

Missy Doyle
 
Last edited by a moderator:
S

Shivani

Herb said:
Since you are requesting a partial exclusion (i.e. up to
$500,000 x 0.75 = $375,000) on your gain, the sale should be
reported on your Schedule D, with an explanatory statement
attached.

If your gain on sale exceeds $375,000, you will owe tax on
the amount in excess (Long Term rate, maximum of 15%).
Now that's conflicting advise. Some people have written that
I do not need to report anything and you say I need to
report on Schedule D? My gain is way less than $375,000. Do
I still need to report on Schedule D? If I am using turbo
tax, how do I attach explanatory statement?
 
Last edited by a moderator:
S

Shivani

Herb said:
Since you are requesting a partial exclusion (i.e. up to
$500,000 x 0.75 = $375,000) on your gain, the sale should be
reported on your Schedule D, with an explanatory statement
attached.

If your gain on sale exceeds $375,000, you will owe tax on
the amount in excess (Long Term rate, maximum of 15%).
Now that's conflicting advise. Some people have written that
I do not need to report anything and you say I need to
report on Schedule D? My gain is way less than $375,000. Do
I still need to report on Schedule D? If I am using turbo
tax, how do I attach explanatory statement?
 
Last edited by a moderator:
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V

Victor Roberts

Shivani"
Herb Smith wrote:
Now that's conflicting advise. Some people have written that
I do not need to report anything and you say I need to
report on Schedule D? My gain is way less than $375,000. Do
I still need to report on Schedule D? If I am using turbo
tax, how do I attach explanatory statement?
Your last question is best answered in the TurboTax user
forum: http://forums.turbotax.com/?lid=site_header
 
Last edited by a moderator:

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