Client purchased home in January 2004 with friend - 50% owner. In April 2005, client was paid off for her share of home because the two were not able to get along. Would this fall under the safe harbor rules of unforeseen circumstances and be eligible for reduced exclusion. I know if a married couple got divorced and had to sell, that sale could fall under unforeseen circumstances.
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peggysioux -
Divorce
Divorce is one of the safe harbor events specified in the regulations. Not getting along with a friend is not one of the safe harbor events. It would probably depend on facts and circumstances, especially whether not getting along was reasonably foreseeable when she bought the house.
Personally, I think that is unenforceably vague, and somebody is going to find a court to rule that anyone can have a reduced exclusion for any reason. Maybe that will be your client? -
I don't see any reason that it is not a taxable sale with gain or loss reportable.Comment
Comment