hobbzilla
Please be easy on me... This is my first post! :)
I purchased a Duplex on April 26, 2001. I lived in one side for 4 years and up to that time treated one side as rental property and one side as primary residence. On 7/26/2005 I purchased a single family home and that became my primary residence. I moved out of the side of the duplex and treated both sides as individual rental properties from that point on. I have a list of depreciable assets which has accumulated over the years for both sides.
Due to medical issues with my son, I moved out of state and sold my house on 6/18/2007 (Residence for < 2 years) and the duplex was sold on 6/28/2007 (Residence for > 2 years of the last 5 years).
I understand I should qualify for the reduced maximum exclusion of any gain on the sale of the house due to the medical issue with my son. However, there was actually a loss due to closing fees, etc.
Question #1.
It appears to be most advantageous to me to treat the now "rental property" side of my former primary residence as the exclusion of the sale of my primary residence as afforded to me under the Taxpayer Relief Act of 1997. What do I do with all of the depreciable list of assets (both those fully depreciated and those still on the books)? More specific: do I dispose of them at the time of the sale? How do I calculate their adjusted basis? Or do I dispose of them at the amount of their original basis and just claim the former depreciation amounts taken?
Question #2.
Since I fail to meet the ownership and use tests, does the loss I took the sale of my house get accounted for somewhere? Where? (Schedule D I presume).
Question #3.
Why didn't I just pay the money to hire a tax professional to prepare and file my taxes for me beginning with year I bought my first piece of real estate -- which also coincided with the year I purchased rental property!?!
Two part Answer for #3: 1) I'm frugal. 2) I'm interested in the subject, eager to learn, very meticulous, and more importantly.. have a hard time trusting people I don't know well with my money when it is in their best interest for me to part with some it.
I purchased a Duplex on April 26, 2001. I lived in one side for 4 years and up to that time treated one side as rental property and one side as primary residence. On 7/26/2005 I purchased a single family home and that became my primary residence. I moved out of the side of the duplex and treated both sides as individual rental properties from that point on. I have a list of depreciable assets which has accumulated over the years for both sides.
Due to medical issues with my son, I moved out of state and sold my house on 6/18/2007 (Residence for < 2 years) and the duplex was sold on 6/28/2007 (Residence for > 2 years of the last 5 years).
I understand I should qualify for the reduced maximum exclusion of any gain on the sale of the house due to the medical issue with my son. However, there was actually a loss due to closing fees, etc.
Question #1.
It appears to be most advantageous to me to treat the now "rental property" side of my former primary residence as the exclusion of the sale of my primary residence as afforded to me under the Taxpayer Relief Act of 1997. What do I do with all of the depreciable list of assets (both those fully depreciated and those still on the books)? More specific: do I dispose of them at the time of the sale? How do I calculate their adjusted basis? Or do I dispose of them at the amount of their original basis and just claim the former depreciation amounts taken?
Question #2.
Since I fail to meet the ownership and use tests, does the loss I took the sale of my house get accounted for somewhere? Where? (Schedule D I presume).
Question #3.
Why didn't I just pay the money to hire a tax professional to prepare and file my taxes for me beginning with year I bought my first piece of real estate -- which also coincided with the year I purchased rental property!?!
Two part Answer for #3: 1) I'm frugal. 2) I'm interested in the subject, eager to learn, very meticulous, and more importantly.. have a hard time trusting people I don't know well with my money when it is in their best interest for me to part with some it.