Sale of home, but not?

[Possi]

My military client purchased a home for 350k in July of 2006. Lived there until they were transferred in Dec. 2008.

Market was bad, so they rented it for a year.

In Jan 2010, they received (after refunding deposit) rent of 680. Tenant moved out and house was put on the market.

USA (military) bought the house for 347k, and sold it.

This isn't really rental property. It's the sale of their home with basis adjusted for recaptured depreciation which will actually create a gain. (No 4797)

Sch D gain on sale of home???
No Sch E for 2010, just rental income on L 21 "other income"?

Thanks~~

[oceanlovin'ea]

seem to remember

I seem to remember that if a house is rented while it is on the market to be sold only for the purpose of not having it sit empty and maybe be vandalized, it is NOT considered rental property.
You would just do the sale of the home as normal but if they did take depreciation you would adjust the basis by that amount.

Linda, EA

[Possi]

Linda...

I seem to remember that if a house is rented while it is on the market to be sold only for the purpose of not having it sit empty and maybe be vandalized, it is NOT considered rental property.
You would just do the sale of the home as normal but if they did take depreciation you would adjust the basis by that amount.

Linda, EA

Thanks Linda. That's what I thought..

I have another question posted about a 1099C regarding personal residence sold on short sale that I am hoping you will look at. You seem to have the most confidence in these. Iooked at a string from last year, one that I had started, and you chimed in. That one was rental property, and a 1099 A, so it really didn't match my situation. Maybe you will have time to look at it. Thanks!

[taxmom34]

i was thinking they had to live there for 3 of the last 5 years to defer any gain, bbbbut , rules are different for military, right?