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My mom and I owned a condo for 1 yr and 9 months in WA state. We sold it and we're trying to figure out how to split the resulting profit (approx $40K total). We each received wire transfers from the escrow company for $20K. Now it's tax time and we're trying to figure out what deductions are available, and how to report any applicable taxes and what the proper forms for this might be? In particular, we are wondering if we can include the closing costs we incurred as an adjustment to our cost basis and ultimately reduce the portion of the $20k that is taxable. Also, as I changed jobs 6 months after we bought it (bought in June 2004, sold in Feb 2006). Wondering if I can take a partial exclusion on capital gains due to having job location changes in Nov. 2004, and again in July 2006). Neither job change was out of state but did effect length of my commute. Thanks so much!

2007-03-30 15:23:34 · 5 answers · asked by mermaidcove29 1 in Business & Finance Taxes United States

5 answers

The first answer is incorrect in the final paragraph. You can, indeed, claim a partial exclusion provided you meet certain conditions. See the link below, in particular page 15. The issue I see is that you changed jobs in Nov 2004 but did not sell it until Feb 2006. That might be viewed as an excessive length of time to hold the property after changing jobs.

2007-03-31 02:08:54 · answer #1 · answered by skip 6 · 1 0

since you lived in the condo for less than 2 years, you will owe long term capital gains on the profit from sale.

you can deduct all expenses in the sale of the property. (deed, title search, sales commission, property tax, )You would figure your cost basis as the price you paid plus any closing fees etc, paid at time of purchase. You actually figure your sales price as the money you received after all expenses. (sounds like it would be the 20k check)
the sale goes on Schedule d under long term capital gains.

changing jobs has nothing to do with the sale of the condo

2007-03-30 15:36:51 · answer #2 · answered by Jo Blo 6 · 2 1

I am not seeing any discussion about a 1099. Wasn't one issued showing the sales proceeds? If so whose ss# is on it?

If a 1099 was issued and that person does not report all the proceeds, expect a letter from the IRS. If so you have an issue in addition to all that has been discussed above.

2007-03-31 05:40:53 · answer #3 · answered by zudmelrose 4 · 0 0

One additional thing on the job change. Even if it was considered timely, which it probably wouldn't be, to deduct it your commute to your new job would have to have been 50 miles FURTHER from your old house than your old job was, in order to deduct moring expenses. So if the distance from your old home to your old job was 12 miles, you wouldn't be able to claim moving expenses unless your new job was at least 62 miles from your old home.

2007-03-31 17:52:49 · answer #4 · answered by Judy 7 · 0 0

study your lease heavily. it really is a written settlement and passes from one proprietor to the subsequent proprietor, and is enforceable. lease regularly maintains after any sale. If the recent proprietors choose you out, they ought to attend or to purchase you out of the lease. foreclosure kills a lease, yet generic sales do no longer extinguish lease. be certain to provide the mandatory 30 day note at expiration. If new proprietor needs in, they should be practice to pay some or all of your relocation expenditures.

2016-12-03 01:28:14 · answer #5 · answered by Anonymous · 0 0

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