NT1310 Unit 1 Assignment 1

1) $250,000 or $500,000 (MFJ) gain exclusion on sale of principal residence as long as the ownership and use test have been met.

2) Divorce-Related sales are required to list the use agreement in the divorce decree so that both spouses may receive the gain exclusion upon the sale of the home.

3) Depreciation taken post-May 6th 1997 can be recaptured as a section 1250 gain, subjecting the recapture amount to a maximum tax rate of 25%.

4) Like-kind exchanges of a residence can allow for the taxpayer to deter the gain under section 1031.

5) The basis of a property a property converted from personal residence to rental property is the lower of the adjusted basis on the date of conversion or the FMV at the time of conversion.

6) As of 2015, the personal energy property credit has expired.

8) If the ownership and use test has been met or the exclusion has already been taken with the past two years, the taxpayer may qualify for a reduced gain exclusion.

9) Tax rules vary for personal-use, rental, or dwelling units used as home property, which is determined based on the number of days rented versus the number of personal use days.

10) Although the gain exclusion can be advantageous and residence automatically qualify if the necessary tests are met, the taxpayer may want to elect out if they anticipate the sale of another home (that would also qualify) to yeild a larger