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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121095  
Subject: Re: Sale of Home Date: 12/16/1998 9:00 PM
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[[Sold Home in May of 1996 had gain of 45K. Have not and will not purchase repalcement home
within 24 mo time frame. can I report gain on 1998 tax return or do I have to amend my 1996 tax
return.]]]

You are required to amend your 1996 tax return. And remember, in 1996 there were no preferred capital gain tax treatment. You should REALLY consider reinvesting within the 24 month time frame. If you do, it is very possible that you can then sell the property (even if you live in it for just a few months) and use the new home excusion gains rules to avoid the TOTAL gain on the sale...and avoid the taxes altogether.

I would assume that since you are writing so late in the year that your 24 months have already expired. So I'm afraid that you missed a big, BIG tax saving opportunity. That's really too bad.

[[ I am divorced now and I filed a joint return in 1996. I suspect Ex will not sign amended
return.]]

Well, that's another problem that could have been avoided if you would have reinvested into a new residence. It just gets worse and worse. You'll still be required to file a joint amended return, even if you pay all of the tax, and even if your spouse will not sign the tax return. You simply have no choice.

[[ Help!]]

I wish I could. If you post was made in January rather than December, I might have been able to lead you to the promised (tax) land. But I'm afraid now it's just too late. Sorry.

If you want to read more about the gain exclusion rules for the sale of a personal residence, check out my series of posts on that very issue in the Taxes FAQ area (archives section).

TMF Taxes
Roy

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