Personal Finance & Money Asked by severtki on May 1, 2021
We just sold our house and vacant land, which we split into two parcels for sale to separate buyers. The land sale closed at the very end of 2020, while the house sale closed a couple weeks later in early 2021.
Capital gains for the sale of the vacant land appears to be excluded under the home sale exclusion (meets all the criteria), and is also covered since it occurred within two years of the sale of the home itself.
Since the land sale occurred in an earlier tax year than the house sale, are we able to claim the exclusion when filing our 2020 taxes, or do we have to pay capital gains for the land sale in our 2020 taxes, and then wait until we file the 2021 taxes to go back and file an amended return for 2020 and receive refund of overpayment?
Since the land sale occurred in an earlier tax year than the house sale, are we able to claim the exclusion when filing our 2020 taxes, or do we have to pay capital gains for the land sale in our 2020 taxes, and then wait until we file the 2021 taxes to go back and file an amended return for 2020 and receive refund of overpayment?
The IRS can't know that the second part of the transaction will ever take place. The deal could fall through, you could change your mind...
Therefore the requirement is to submit the first part of the transaction, under the assumption that the second part never takes place. Pay the taxes.
Then after the second part takes place, amend the taxes from the first transaction, and file the proper forms for the second part when they are due.
Answered by mhoran_psprep on May 1, 2021
Get help from others!
Recent Questions
Recent Answers
© 2024 TransWikia.com. All rights reserved. Sites we Love: PCI Database, UKBizDB, Menu Kuliner, Sharing RPP