Taxpayer bought home in 2008 and lived in it until 2011 when the family moved due to job relocation and then house was rented. House was sold in 2016. In figuring gain on the sale, is there some type of calculation that needs to be done due to the prior use as personal home?
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See if below helps
If you do a search on this site for this subject it was addressed many times
Also, reference TTB:
Sale of principal residence with prior rental use. For sales after December 31, 2008, any gain allocated to periods of nonqualified use is not excluded from gross income. Nonqualified use is any period (not including any period before January 1, 2009) during which the property is not used by the taxpayer as a principal residence. See Business Use or Rental of Home—Application of Exclusion Rules, page 6-21.Last edited by TAXNJ; 03-20-2017, 07:06 AM.Always cite your source for support to defend your opinion -
If it was sold at a gain and they did not move back into the house, no, there isn't anything special to do for the sale.
In the event the Fair Market Value in 2011 was less than the Adjusted Basis at that time, you should have been using the FMV for depreciation. If you are selling it at a gain (sale price more than the Adjusted Basis), be sure to use the Adjusted Basis, not the FMV in 2011 (the FMV in 2011 would be used to calculate a loss, and if the sale price was between the FMV and Adjusted Basis, there is $0 gain/loss).Comment
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Thanks I did do search before I posted and only found one hit that was not helpful. Guess I used wrong key wordsComment
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a BONNIE post similar to your post - maybe ?:
Also if you use PERSONAL & RENTAL RESIDENCE IN "ADVANCED SEARCH" you will find manyAlways cite your source for support to defend your opinionComment
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Are you able to resolve this issue? Prior posts provide any insight?Always cite your source for support to defend your opinionComment
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