My CPA is Offf the Trail, (Isn't She?)

[chrisjul]

Last year, I sold my home after living in it for 18 months and made a profit. I thought that this profit would be excluded from capital gains because I moved due to a job transfer, and that 75% of $500K (married) would be excluded. She says, NO....only 75% of my profit is excluded and I owe capital gains on the 25% ( 6 months of 24 required for exclusion).

Your thoughts?
Thanks in advance,
Chris

 

[bbbamI]

I'm not sure about the job transfer, but I think that you have to be in a house for 2 years to get up to $500k for married. Perhaps the IRS website could provide this info.

 

[retire@40]

The proration is on the exclusion amount, not the gain.

 

[saluki9]

Tell your CPA that this CPA says he/she is wrong.

Print a copy of IRS Pub 523 http://www.irs.gov/publications/p523/ar02.html#d0e3051

You are entitled to a reduced maximum exclusion. There is a simple worsheet at the bottom of that publication that will walk you through your exclusion.

 

[chrisjul]

Thanks so much! Great forum!

Chris

 

[Buckeye]

So what other guidelines is she misinterpreting? This error involves a very basic situation. I would not have confidence in this person to do my taxes and the price is probably at a premium price since she has the CPA designation.

 

[chrisjul]

Yes, that's my concern. I used her father for many years, but he died last year. I decided to give her a shot this year since she had worked with him so long. Guess I'l reconsider!

 

[Texas Proud]

Yes, that's my concern. I used her father for many years, but he died last year. I decided to give her a shot this year since she had worked with him so long. Guess I'l reconsider!

First.... you sure she is a CPA?

Second (and more important), does she have education in TAXES


I am a CPA, had formal training in taxes.... did taxes for 4 years many years ago, but would not want to do work today doing people's taxes as the laws change over the years... sure, I could get it done, but would I miss the things that might save money

 

[jazz4cash]

Second (and more important), does she have education in TAXES

This is on point!

 

[saluki9]

First.... you sure she is a CPA?

Second (and more important), does she have education in TAXES


I am a CPA, had formal training in taxes.... did taxes for 4 years many years ago, but would not want to do work today doing people's taxes as the laws change over the years... sure, I could get it done, but would I miss the things that might save money

This is very important for people to understand, because I don't think it is said enough. CPA's DO NOT receive much training in taxes (as hard as that may be to believe) The majority of college courses and CPA exam subjects relate to the preparation and reporting of GAAP book income, not taxes. When I took the exam, taxes was hardly enough to fill up one morning session of the exam.

I only say thing because people seem shocked when a CPA (ok, me) doesn't know every single code section of tax law.