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Old 08-12-2017, 05:39 PM   #21
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My kids lived with me for 18 years tax free. Guess I will have to go back and amend a few returns.
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Old 08-12-2017, 09:31 PM   #22
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Originally Posted by Bigdawg View Post
My kids lived with me for 18 years tax free. Guess I will have to go back and amend a few returns.
gauss can probably help you with those amended returns.
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Old 08-13-2017, 03:48 AM   #23
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gauss can probably help you with those amended returns.
If the kids were not paying expenses during those 18 years, would there be any need to amend returns?
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Old 08-14-2017, 06:34 AM   #24
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What happens to the capital gains exclusion on the primary residence when you turn half of it into a rental?
Good Question!

I believe in the simple case where you are renting a room within the house that you live, the simplified (non-business space) rules apply (ie no need to file form 4797 upon sale - no need to allocate basis between business and personal use etc.)

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Determine whether the space used for business during the 5 years before the sale is considered to be within your home or not. If the business or rental space was physically part of the living area of your home, such as a spare room used as a bed-and-breakfast bedroom or attic space used as a home office, your business usage doesn’t affect your gain/loss calculations. Complete How To Figure Your Gain or Loss Worksheet . If the business or rental space wasn’t within your living space, such as a first-floor store with residence, an apartment with its own entrance (and kitchen and bath), or a working farm with a farmhouse on the property, continue to Determine whether the business or rental space still counts as a business space , next.
In this case the Capital Gain exclusion would still be available, but the depreciation that was taken, or could have been taken, during the rental years would not be excludable and would need to be addressed (see Schedule D Line 19 - "Unrecaptured Section 1250 Gain")

Publication 523 "Selling Your Home" - seems to do a fairly good job at laying all this out.

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