NASSAUSUFFOLK

A client had two contiguous apartments as his residence in a condo.  in 2014 he sold one of the units.  Of course he neglected to tell me that he sold only one of the apartments, not that I was aware that there were two apartments .  There was a modest profit, using substantially less than the $250,000, exclusion.   In 2015, he sold the second apartment.  Both apartments were used and sold in the proper time frame to qualify for the exclusion.

Any thoughts about the second apartment qualifying for the exclusion?

Thanks

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Michael Rubinstein
Michael D. Rubinstein CPA, PC
Woodbury NY
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i think because of 121(b)(3)  he is precluded from using the exclusion provision of  121(a)  2 years from the date he last used it.

unfortunately  seems out of luck

However,    121(d)(9)(D)ii  they discuss a revocation of this election.  This provision applies to certain people.  namely armed forces. However, it may be available to others.   

so   if he is stuck,( and i think he is )  would it make sense to revoke his earlier election,   and then use the election  for this sale..  if yes, i would be happy to check further as to how it is revoked.

perhaps this is food for thought..

Abby

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Abby Alhante
KURCIAS & ALHANTE, CPAs LLC
Melville NY

Original Message:
Sent: 04-02-2016 11:46
From: Michael Rubinstein
Subject: a principal residence sold in two different years

A client had two contiguous apartments as his residence in a condo.  in 2014 he sold one of the units.  Of course he neglected to tell me that he sold only one of the apartments, not that I was aware that there were two apartments .  There was a modest profit, using substantially less than the $250,000, exclusion.   In 2015, he sold the second apartment.  Both apartments were used and sold in the proper time frame to qualify for the exclusion.

Any thoughts about the second apartment qualifying for the exclusion?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
Woodbury NY
------------------------------

If the "home" consisted of 2 pieces, and it is sold within the allowable period, I am going to find a way to use the exclusion for the total, even if spread over 2 years and sold separately.  It may mean filing an amended tax return for year 1.  It may mean showing the sale in 2 pieces over 2 years.  It may mean attaching an explanation to both years and using the unused part of the $250,000 in year 2.  I'd have to think about that with all the facts.   But there is no reason I can think of why the taxpayer should not get the full exclusion.  I would think it would be fairly common in Manhattan for condo or co-op apartments to be combined by buying the unit next door.  Depending on the extent of getting approvals, breaking down walls, and doing extensive renovations, we could have similar situations not that infrequently. When such apartments are sold, possibly as separate pieces, is there any doubt that it is one unit to the seller, subject to all the tax benefits available.  

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Lawrence Prosky
PROSKY & ROSENFELD, LLP
Garden City NY

Original Message:
Sent: 04-02-2016 11:46
From: Michael Rubinstein
Subject: a principal residence sold in two different years

A client had two contiguous apartments as his residence in a condo.  in 2014 he sold one of the units.  Of course he neglected to tell me that he sold only one of the apartments, not that I was aware that there were two apartments .  There was a modest profit, using substantially less than the $250,000, exclusion.   In 2015, he sold the second apartment.  Both apartments were used and sold in the proper time frame to qualify for the exclusion.

Any thoughts about the second apartment qualifying for the exclusion?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
Woodbury NY
------------------------------

Original Message------

If the "home" consisted of 2 pieces, and it is sold within the allowable period, I am going to find a way to use the exclusion for the total, even if spread over 2 years and sold separately.  It may mean filing an amended tax return for year 1.  It may mean showing the sale in 2 pieces over 2 years.  It may mean attaching an explanation to both years and using the unused part of the $250,000 in year 2.  I'd have to think about that with all the facts.   But there is no reason I can think of why the taxpayer should not get the full exclusion.  I would think it would be fairly common in Manhattan for condo or co-op apartments to be combined by buying the unit next door.  Depending on the extent of getting approvals, breaking down walls, and doing extensive renovations, we could have similar situations not that infrequently. When such apartments are sold, possibly as separate pieces, is there any doubt that it is one unit to the seller, subject to all the tax benefits available.  

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Lawrence Prosky
PROSKY & ROSENFELD, LLP
Garden City NY
------------------------------

Thanks for the replies. I will review further and let you know.

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Michael Rubinstein
Michael D. Rubinstein CPA, PC
Woodbury NY

Original Message:
Sent: 04-03-2016 09:15
From: Abby Alhante
Subject: a principal residence sold in two different years

Do keep us posted on what you do.   As you said , it should be fairly common. 

I for one, would be interested.

 

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