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02-07-2018 01:39 PM
I sold my previous home in 2017. I lived there over two years and rented it out for less than two years. After reading a lot over the internet, I am clear about 1) I do qualify for exclusion of gain (as long as it is less than 500k for married couple); 2) I have to recapture the depreciation that I claimed or allowed to claim during the rental period. However, regarding to how to fill 4797, I got confused.
1) someone said the land and the house should be separated and filled to part I, and Part III respectively (https://ttlc.intuit.com/questions/2273411-how-do-i-fill-out-tax-form-4797-after-sale-of-a-rental-pro...). Sounds reasonable and I did separate them when I report them at the first year of rental with form 4562. But where can I found the instructions or original text about this method in IRS publications?
2) Is it OK to not separate the land and house in filling 4797? Seems someone does it in this way too. (http://www.asktaxguru.com/7010-sale-of-primary-home-used-as-rental.html)
So, what is the correct way to fill the form? And according to the instruction, one should put exclusion in line 2, part I, as loss. Then will this mix with the land part if the land part be put in part I?
Thanks in advance.
Solved! Go to Solution.
02-18-2018 05:47 PM
Welcome to H&R Block Community.
Thank you for being clear about already determining that you do qualify for the exclusion of the gain for sale of home. I can’t comment on other people’s posts here, but I can direct you to the proper forms.
For the sale of a main home, any gain on the personal use of the main home that is not excluded from tax gets reported on Schedule D, and Form 8949.
If you are using H&R Block software or the online system there is a specific section entitled Sale of Home. The Sale of Home section will walk you through your situation, including the additional facts based on your situation where the home was rented for part of the time.
I hope this helps you out! Please ask if you have any further questions.
Tax Research Specialist
02-22-2018 12:56 PM
That is correct. Based on the information you provided, the Schedule D, and Form 8949 will take care of the full transaction.
Tax Research Specialist