Whether looking for assistance with tax preparation, business consulting, auditing or payroll and bookkeeping services, Shawn M. Williams, CPA, LLC is absolutely dedicated to providing services and solutions that will assist you in setting and achieving your financial goals. Explore our Website and blog to learn about all the ways that we can help you do just that...and more. To find out more about seeing through the numbers, please contact us for your free initial consultation.
Tuesday, September 8, 2015
No Principal Residence Gain Exclusion after Seller Reacquires Property
A taxpayer sold his
principal residence and claimed a gain exclusion under IRC Sec. 121. Upon the
buyer's default of the installment agreement, the taxpayer (seller) reacquired
the property. The Tax Court examined the interplay between IRC Secs. 121 (principal
gain exclusion) and 1038 (disregarded gain for reacquisition of property upon
buyer's default on a debt secured by the property other than payments received
prior to the reacquisition). Although the cash in excess of gain previously
reported on the installment sale was taxable, the question was whether the gain
could be excluded under IRC Sec. 121. The Tax Court determined that the gain
could not be excluded. On appeal, the Eighth Circuit affirmed the Tax Court,
holding that because the taxpayer didn't resell the property within one year,
which is required under IRC Sec. 1038(e) , he wasn't entitled to the principal
gain exclusion. Marvin E. DeBough, No. 14-3036, 2015 WL 5059103, (CA
8)
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment