Learning Objective:
Review and improve the understanding of the tax rules that apply when you sell your home, use your home for business or rental, and sell a second home.
Prerequisite: None
Course level: Basic
Advanced preparation: None
Teaching method: Online study
Recommended hours: 2
Summary of Contents:
Lesson Content and Objectives |
Reading
Assignment |
| Selling Your Home |
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1. Introduction, Main Home, & Figuring Gain or Loss |
Section 1 |
The learning objectives for this lesson are to gain an understanding of:
- Land
- More than one home
- Selling price
- Amount realized
- Adjusted basis
- Amount of gain or loss
- Other dispositions
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| 2. Determining Basis |
Section 2 |
The learning objectives for this lesson are to gain an understanding of:
- Cost as basis
- Basis other than cost
- Adjusted basis
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| 3. Excluding the gain |
Section 3 |
The learning objectives for this lesson are to gain an understanding of:
- Maximum exclusion
- Ownership and use tests
- Period of ownership and use
- Married persons
- Reduced maximum exclusion
- More than one home sold during 2-year period
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| 4. Business Use or Rental of Home & Excluding the Sale |
Section 4 |
The learning objectives for this lesson are to gain an understanding of:
- Property used partly for business or rental
- Installment sale
- Seller-financed mortgage
- Individual taxpayer identification number
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| 5. Special Situations & Deducting Taxes |
Section 5 |
The learning objectives for this lesson are to gain an understanding of:
- Sale of a home acquired in like-kind-exchange
- Like-kind exchange of property used partly for business
- Expatriates
- Home destroyed or condemned
- Sale of remainder interest
- Exception for sales to related persons
- Real estate taxes
- Transfer taxes
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| 6. Recapturing a Federal Mortgage Subsidy |
Section 6 |
The learning objectives for this lesson are to gain an understanding of:
- Loans subject to recapture rules
- Federal subsidy benefit
- Sale or other disposition
- When the recapture applies
- When the recapture does not apply
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Sample Exam Questions:
1. Some examples of closing costs that can be added to the buyer's basis include:
a. fire insurance premiums and credit report processing fees
b. legal fees, utility installation charges, and property taxes
c. loan assumption fees and appraisal fees
d. refinancing fees and rent on the house before the sale
2. Greg owned his home until September 30th and then sold it to Brian. Brian paid all the real estate taxes for the calendar year when he bought Greg's house. The total was $2,000. That's okay, because Brain can:
a. sue Greg for reimbursement later.
b. exclude the $2,000 on his income taxes.
c. deduct the entire $2,000 from his income taxes.
d. add a proportionate amount of the $2,000 to his basis.
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