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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16559
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I have a question regarding my 2012 return. I sold a house

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I have a question regarding my 2012 return. I sold a house in September 2012 that was owned equally by myself and my parents. I received all the proceeds from the sale and thus I was the only one reporting the sale on the tax return. I lived in this home until July 2011 but my parents continued to live in the house until the sale. Do I have to report the time period from July 2011 to September 2012 as 'nonqualified use' or do I not have to report this since (and keep nonqualified use to 0 days) we owned the house jointly and my parents continued to live in the house until the sale? My capital gain difference between the two choices is about $7000. Thank you.

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

Did you live in the home at least 2 out of the last 5 years?

Customer:

Yes, I lived in the home for last 5 years ending on sale date minus that 15 month period from July 2011 to Sept 2012

MyVirtualCPA :

Then you can exclude the capital gain from the sale of this property

Customer:

ok, so i can enter '0' for nonqualified use days?

MyVirtualCPA :

Yes, you would not have any days of non qualified use

Customer:

Oh ok, I already filed a return with 15 month of nonqualified use reported so I'll have to file an amended return to correct this, right?

Customer:

Form 1040x?

MyVirtualCPA :

Yes, that would be correct.

Customer:

Ok, great!

Customer:

thank you for your help!

MyVirtualCPA :

http://www.irs.gov/publications/p523/ar02.html#en_US_2012_publink1000240774

MyVirtualCPA :

There's you a link to publication 523 where you can see the exceptions to nonqualified use

MyVirtualCPA :

Is there anything else I can assist you with today?

MyVirtualCPA :

If not, please rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

Nope, that's it. I'll go ahead and give you an excellent rating for your help. Thanks!

MyVirtualCPA :

You're welcome

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