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Author: buzman Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: Home sale woes Date: 7/12/2002 7:19 PM
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Again, I need someone to mediate.

My co-worker (HR Block grad-note I have great respect for HR Block grads) is worried that her home sale exclusion from taxation (up to 250K) will be negated since her soon to be ex depreciated part of the home as a home office deduction.

Does that negate the exclusion? I don't think it does. Wouldn't she just have to include as income the portion of the house previously depreciated.

Also, she feels very confident that she is only allowed a 250k exclusion. Even though they are still married she filed Head of Household last year so they can't file in 2002 as married/joint and get the 500k exclusion.

buzman
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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 60925 of 121572
Subject: Re: Home sale woes Date: 7/12/2002 7:34 PM
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My co-worker (HR Block grad-note I have great respect for HR Block grads) is worried that her home sale exclusion from taxation (up to 250K) will be negated since her soon to be ex depreciated part of the home as a home office deduction.

Does that negate the exclusion? I don't think it does. Wouldn't she just have to include as income the portion of the house previously depreciated.


I agree with you. Some depreciation would be recaptured, but the bulk of the gain would be subject to the exclusion.

Also, she feels very confident that she is only allowed a 250k exclusion. Even though they are still married she filed Head of Household last year so they can't file in 2002 as married/joint and get the 500k exclusion.

Any individual is limited to $250,000. Basic math makes that limit $500,000 on a joint return. That cannot break down as $350K for her and $150K for him.

Married taxapayers determine their filing status each year. If they're still married on 12/31/2002, they can file a joint return for 2002 if they both want to. How they filed 2001 doesn't matter.

The previous paragraph was based on a legitimate 2001 HofH filing by her, i.e. dependent child, didn't live together after June, etc. If she just filed HofH because she felt like it, she needs to amend the 2001 return.

Phil

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Author: buzman Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 60927 of 121572
Subject: Re: Home sale woes Date: 7/13/2002 8:26 AM
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The previous paragraph was based on a legitimate 2001 HofH filing by her, i.e. dependent child, didn't live together after June, etc

The 2001 filing is legit.

I agree with you. Some depreciation would be recaptured, but the bulk of the gain would be subject to the exclusion.

She's not gonna like to hear this, she grew up in California so she thinks a southern accent makes you stupid. <grin, like a mule eatin' briars>

buzman


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