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Anne
Anne, Master Tax Preparer
Category: Tax
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Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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I am needing help with filling out a 593-C form. I am the

Customer Question

I am needing help with filling out a 593-C form. I am the sole beneficiary to her estate after she passed away, and am currently selling her home. I am taking a loss on the property as its being sold for less than the market value price. I am not sure
what i "claim" on this form. can you assist?
Submitted: 1 year ago.
Category: Tax
Expert:  Anne replied 1 year ago.

HI

I'm Anne. I've been preparing taxes for 27 years and I'll be helping you tonight.

Since you are the sole beneficiary, you may check box 2 under Part II "Certifications Which Fully Exempt the Sale from Withholding, assuming that the decedent lived in the house as their principle residence for at least 2 of the 5 years prior to the sale.

This would mean that there would be No withholding required.

If you have any questions, please post them here, and I'll be notified.

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Expert:  Anne replied 1 year ago.

HI

I'm Anne. I've been preparing taxes for 27 years and I'll be helping you tonight.

Since you are the sole beneficiary, you may check box 2 under Part II "Certifications Which Fully Exempt the Sale from Withholding, assuming that the decedent lived in the house as their principle residence for at least 2 of the 5 years prior to the sale.

This would mean that there would be No withholding required.

If you have any questions, please post them here, and I'll be notified.

If this has answered your question, please take a moment to rate positive (smiley faces or stars)

It is only through positive ratings that we are compensated for our time and knowledge.

Thank you for choosing justanswer.

Expert:  Anne replied 1 year ago.

HI

I see that you posted this question twice and received 2 different answers. For that I apologize.

If you look at page 5 in the in the instructions for Form 593-C found here:

https://www.ftb.ca.gov/forms/2015/15_593bk.pdf

At the very top of left hand corner, it says the following:

Form 593-C/Form 593-E Booklet

2014

Page 5

Line 2 – Property last used as your principal residence

If the property was last used as the seller’s, transferor’s, or decedent's

principal residence within the meaning of IRC Section 121 without regard

to the two-year time period, no withholding is required

As I mentioned above, if the decedent lived in that house as their primary residence, then there is no withholding required, and you can check box 2

It does not say that YOU must have owned the home, or lived in it as YOUR primary residence, only the person that passed.

There is almost always what we (and the IRS) calls an "ordering rule". In this instance the ordering rule would be as they are listed on the 593-C form

What this means is that IF box 2 would not apply to you OR the decedent, (for example, if this was NOT the decedent's home, but a rental property) then you would got to box 3 to see if THAT box applied.

So as long as this home was the decedent's home (the reference to Section 121 merely explains what a primary residence is.......as opposed to say a vacation home or rental property) then you would stop at box 2.

I did make one mistake in my previous answer. The decedent did NOT have to live in the home 2 out of 5 years prior to their death. If they were living in it as their home, for ANY length of time UP TO their death, then it qualifies as their principle residence, or main home if you will, and it still qualifies for box 2.

When the other expert mentioned that YOU can't have 2 primary residences is true. However, what he missed is that, unless you held this property for yourself as a vacation home, or rental property (which from your question I assume you did not) then you may, according to the information I just provided, use the decedent's use of the property (as their home) immediately before you acquired the home as their beneficiary.

Again, If you have any questions, please post them here, and I'll be notified.

If this has answered your question, please take a moment to rate positive (smiley faces or stars)

It is only through positive ratings that we are compensated for our time and knowledge.

Thank you for choosing justanswer.

.

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