Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 12-29-2009, 05:02 PM
Junior Member
 
Join Date: Dec 2009
Posts: 2
Sale of a non principal residence

I have gross proceeds on sale of house of $50,000.
Expenses on sale of house (commissions, closing cost, etc) of $5,000. Fair market value at time of sale $55,000. This home was inherited and not a principal residence.
On schedule D do I add the expenses of selling to the fair market value and enter that in box e) cost or other basis or subtract the expenses from the gross proceeds (gross proceeds appear on the 1099-s) and put that net number in box (d ) sales price . Since I will be efiling, if I use the net proceeds in box (d) it will not match what the IRS show on the 1099 submitted to them from the title company.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 12-29-2009, 09:50 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,417
Blog Entries: 3
You may not be liable for any TAXES! The reason is that the cost basis of the inherited property would be equal to the FMV of the property (that was inherited to you) at the date of transfer of the house!

Thus, the adjusted sale price would be

Sale Price ...............$55,000
Less:Commission.......<$5,000.>
Less: Cost Basis of the house (FMV at date of transfer)
=...... ...................Recognized Gain

In other words, your true capital gains may be considerably less than what you are assuming. I strongly suggest that you consult your local CPA to ensure that you have captured the correct cost basis which would ensure that you pay the least possible taxes resulting from the capital gain on the sale of the home!

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 12-30-2009, 06:47 AM
Junior Member
 
Join Date: Dec 2009
Posts: 2
"I didn't ask my question the right way. What I am concerned about is matching the gross proceeds figure of $50,000 that the IRS will receive on the 1099 from the title company with a like figure on my tax return schedule D.The Proceeds less expenses will be $45,000 (commission, etc.). which I would put in box (d) sales price. The IRS will be looking for $50,000 in box (d). Won't this cause a problem?"



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
How is principal resident defined in 1st time home buyer credit? mannym Tax Credit 0 05-08-2009 09:09 AM
Sale Of Spouse's 50% Residence To Child txman22 Divorce Tax Issues 0 03-13-2009 02:48 PM
Capital asset sale or Second Home Sale? Or Gift??? dawnjellybean Income 0 02-04-2009 07:22 PM
Tax Implication for sale of adjacent lot on Principal Residence? TaxGuru Capital Gains 0 07-24-2008 12:47 PM
Sale of Principal Home Adam Capital Gains 1 01-16-2007 10:04 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.