house destroyed in a qualified disaster -insurance recovery brings the basis down to a small amount - the property, which is only land now, is sold 4 months after the disaster for $50,000 more than the adjusted basis after the disaster - can the gain on the sale of the land be excluded? - the taxpayer had lived in and owned the house for more than 5 years
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If the taxpayer receives more than the adjusted basis then the gain may be taxable. There are a very narrow exceptions. See the pub referenced above.Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR -
What about the residence exception of excluding a gain of up to $500,000?Comment
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