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Subject:  Re: To declare or not to declare? Date:  4/9/2005  4:05 PM
Author:  Wradical Number:  78473 of 132660

Situation: Over 65, sold principal residence, married and filing jointly, and need to know whether to declare sale proceeds.

The responses I received were:

"If the net gain was over $250k,($500K if married and filing jointly) the sale must be reported. If the sale is reportable, and there is a gain, you take the exemption in Sch D, col f (description is "Sec 121 Exclusion" (enter a negative number). The exclusion is the lesser of the gain or $250k($500K if married and filing jointly)."

Yeah but... according to IRS Pub 523, unless there is a taxable gain on a sale of a principal residence the transaction should not be reported even if a 1099-S is received."

Which answer is correct?

I think they both are. If you read closely, they do not conflict, as I see it.

However, if I'm doing a return where a 1099-S WAS received, and the gain was not taxable, I would report the sale by showing the gross proceeds and a cost equal to that, for no gain.


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