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Were to report gain on sale of residence used partly for

business? JA: The Expert will know...
Were to report gain on sale of residence used partly for business?
JA: The Expert will know how to help. Please tell me more, so we can help you best.
Customer: Long term gain; deprec taken since 1999 $11,515. Original purch price $80,000. Sale price $155,000
JA: Is there anything else important you think the Expert should know?
Customer: Taxpayer sold old residence in 2016 and purchased new residence same year.
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Answered in 9 minutes by:
9/23/2017
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,242
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Hi - Prior to issuing corrective regulations in December 2002, the IRS operated under the rule that, if you used your residence for both personal and business purposes, you would be treated as having sold two separate properties for purposes of using the home sale gain exclusion: a personal residence and a business building.

...

The profit you realize on the sale of your home would be entitled to the $250,000/$500,000 exclusion, but any profit you realize on the sale of the business part of your property would be taxed.

...

But now, if the business use occurred within the same dwelling unit, the portion of your gain subject to tax is the amount of depreciation you deducted in the past as a home office expense.

...

SO now only the 11515 is recaptured. If it was straight line it's at the recapture rate of 25%. The rest of the gain is excluded under §121.

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You'll report the recapture on form 4797.

...

Please let me know if you have ANY questions at all, before rating me.

If this has helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

I hope that you’ll rate me based on my accuracy and thoroughness, rather than any good news/bad news content.

That’s the only way JustAnswer.com will compensate me for the work here.

Thanks,

Lane

I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice 1986

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Customer reply replied 3 months ago
Do I need to report the recapture in Part I, II, or III of Form 4797 and do I also report gross sales, adjusted basis, etc?

Part III and use only the depreciation amount as price and basis

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This is 1250 property

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,242
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified
Lane and 87 other Tax Specialists are ready to help you
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Customer reply replied 3 months ago
I am working this thru my tax software before I credit the Expert.
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Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,242
13,242 Satisfied Customers
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

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