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emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2997
Experience:  IRS licensed Enrolled Agent and tax instructor
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Purchased home (23 acres), added mobile home - June, 2009

Customer Question

Purchased home (23 acres), added mobile home - June, 2009
Purchased add'l 12 acres adjacent in October 2009. Used both properties for ranching.
Sold 12 acres in July of 2015. Sold mobile home and replaced with larger mobile.
Does the 12 acres qualify as part of home for exemption purposes?
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.

Hi. My name is ***** ***** I will be happy to help you.

When you said you used it for ranching. Did you do it as for profit business activity?

Expert:  emc011075 replied 1 year ago.

Also, when you sold the mobile home, did you sell it with the land or you just replaced one mobile home for another?

Customer: replied 1 year ago.
I assume filing Sch F (even though losses reported) is considered business purpose. Am keeping the 23 acres, just replacing the mobile home with a larger one.
Customer: replied 1 year ago.
The home replacement occurred about 6 weeks after the sale of the 12 acres
Expert:  emc011075 replied 1 year ago.

Couple of issues here. If the 12-acre land was used for ranching, it has to be treated as sale of business property and the exclusion for the sale of personal residence cannot be applied here. Also, the fact that you didn't sell the original land that the 12-acre parcel was attached to, will also make it ineligible for the exclusion.

Expert:  emc011075 replied 1 year ago.

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

And if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.

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