Personal Finance & Money Asked by Scruffy Paws on May 25, 2021
I have a single family home that used to be my personal residence for several years and then I converted to a rental property for the last 10 years. My last tenant’s lease expired at the end of 2019 at which point I renovated the kitchen and did a few other fixes to get it ready for sale and sold it in early 2020.
My question is, how do I account for the sale on my 2020 taxes? I did not try to rent it out at all in 2020 because it was on the market and sold a few months into the year.
Based on my limited reading of documents from the IRS I should consider this a second home and put it on Form 8949 because it wasn’t rented and I didn’t try within 2020 specifically. It seems odd, though, because the purpose of the property didn’t change and if it had sold a couple months earlier in the same year my tenant left it would definitely have been considered a rental and therefore put on Form 4797. Which is most accurate?
And if it should be a second home, where do I account for the depreciation I’ve had to declare the last 10 years. No doubt the government is going to want some of that back. ?
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