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Old 02-20-2012, 05:05 PM
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Sale of primary home used as a rental

I have confusion about how to report unrecaptured section 1250 gain on scheduled D. May taxes are pretty simple other than the following (i.e. I'm not in a partnership, don't have foreign income, etc. I just have W2 Income and some mutual funds that report 1099 forms to me)

I'll try to keep this as simple as possible, but I'm confused about how/where to report gains without double counting.

The Facts:
*I sold my (former) primary residence in June 2011.
*I moved out of this house in Aug 2008.
*I tried to sell, but couldn't, so I rented it from Dec 2008 to Jan 2011
*I sold the house in June 2011 (it was unoccupied form Jan to June 2011)
*I claimed ~10K of depreciation using MACRS to offset rental income while it was rented.
*I received a form 1099-s substitute form when I sold the house

What I think I Know:
*I qualify for an exemption of capital gains on the house (since I used it as my main home for 2 of the previous 5 years)
*the ~$10K of depreciation will result in my not being able to exempt the full amount of the gain. It will be treated as an unrecaptured section 1250 gain.
*I must fill out from 8949 because I received form 1099-s (and I don't qualify to exclude all of my gain).
*I must fill out form 4797 because it was a rental house at the time of sale.
*Filling out Form 8949 suggests there is a $10K reportable gain (the amount of the deprecation) and tells me to report that on line 10 of Schedule D.
*Form 4797 also results in a calculation of the $10K gain, and Schedule tells me to report on Schedule D line 11. (this would seem to double count the gain)
*I am filling out form 4797 b/c it was a property used for business purposes at time of sale.
*Line 14 of the 1040 itself is a place to enter "Other Gains or Losses", and all the 1040 instructions say is "If you sold or exchanged assets used in a trade or business, see Instructions for form 4797" (this would seem to triple count the gain)

These last few items would seem to suggest that I am double (or triple) counting the gain on schedule D, and this is the source of my questions.

Did I fill out the forms wrong? (either 8949 or 4797... However, they seem like their intent is to measure the same thing in my case)

Do I not really need to report the $10K of depreciation as a gain, thereby making the reporting of it irrelevant?

Do I not need to fill out form 4797 b/c it wasn't actually renter-occupied at time of sale?

Is Line 14 of the 1040 irrelevant for me?

Many thanks to anyone who can help...



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