NASSAUSUFFOLK

Hi Everyone,

I have a client who is being audited by NYS on a sale of his property in 2016.  The client is taking the position that they lived there for 2 of the last 5 years and therefore took the $500k exclusion on 2 of the 3 apartment building.

To be clear, the taxpayers claim they lived in 2 of the 3 apartments through May 2014, then rented the 3 apartments through May 2016 and then sold the building in May 2016.

What are my client's requirements for providing records for years that are closed, which in this case would be through 2014?

NYS is asking for records to prove they lived there through May 2014 and they want bank statements to prove income and expenses for these closed years.  The taxpayers provided utility bills for both apartments in their names through May 2014 but have nothing else to show them.

Thank you in advance for your reply.

Paul

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Paul D. Tusa CPA
TUSA & ASSOCIATES, CPA, PC
N Bellmore NY
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I believe that New York is similar to Massachusetts in that residency is a case by case basis. Other documentation that I would try to get

1) old drivers license (or go to Registry and ask for letter on their letterhead showing old address)

2) you can request old bank statements. Your client most likely will have to pay for this

3) For the closed tax returns, did your client claim any charitable deductions? If so do they have a copy of the charitable letter acknowledgment- maybe it’s attached to the tax return?

4) W2s and 1099s (should be able to get copies)

5) Google your client’s address - While pages will list prior addresses

6)If your client holds any licenses, ask the licensing board for a letter listing prior addresses (I realize that this may be too challenging for the N.Y. Office of Professions)

7) If they belonged to a religious organization, ask for a letter from their clergy / organization.

Good luck
Irene

Wachsler CPA, LLC
Irene Wachsler, CPA
781.883.3174
irene@iw-cpa.com
Sent from my iPhone


Original Message------

Hi Everyone,

I have a client who is being audited by NYS on a sale of his property in 2016.  The client is taking the position that they lived there for 2 of the last 5 years and therefore took the $500k exclusion on 2 of the 3 apartment building.

To be clear, the taxpayers claim they lived in 2 of the 3 apartments through May 2014, then rented the 3 apartments through May 2016 and then sold the building in May 2016.

What are my client's requirements for providing records for years that are closed, which in this case would be through 2014?

NYS is asking for records to prove they lived there through May 2014 and they want bank statements to prove income and expenses for these closed years.  The taxpayers provided utility bills for both apartments in their names through May 2014 but have nothing else to show them.

Thank you in advance for your reply.

Paul

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Paul D. Tusa CPA
TUSA & ASSOCIATES, CPA, PC
N Bellmore NY
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