Taxpayer purchased a residence in December of 2002. 2003 through 2005 residence used as a rental. 2006 and 2007 taxpayer moved into house and lived as primary residence. 2008 put it back as a rental. Home was foreclosed in 2009. If it had been a rental all years, there would be a $42,000 loss. How do I handle being four years as rental and two years as primary residence.
-
-
Rental/Personal Residence
Bumping up hoping to get some feedback. Thanks to all....... -
I'd handle it with a Form 4868 and tell the client we need enough time to research it and get it right, which just isn't possible during the tax season rush. If he's too impatient to understand, then let him sit in HRB's office until they get around to him. At least their deep pockets and E&O insurance will cover the penalties if they get it wrong."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
-
Well, it would be prorated. I would want to document this pretty closely with evidence that it was actually used in this manner (persona/rental). On the surface, looks like he may meet the 2 out of last 5 years for personal residence for exclusion for that part of it. Looks like he could classify four years as rental. Can he/you document this usage with prior tax returns? And I agree with John. Get all the documentation before jumping in.Originally posted by peggysioux View PostComment
Comment