In addition, 7% of the
excluded gain was also treated as an addition to the shareholder's alternative minimum taxable income.
Alice hasn't
excluded gain under [section]121 on a prior sale or exchange of property within the last two years, so she's eligible to exclude up to $125,000 of the gain from the sale of the house (12/24 X $250,000).
1038(b) categorizes the gain from the repossession of real property as either income reported on a prior year's tax return (returned as income) or as income not yet reported (returned) and that DeBough's $500,000 of previously
excluded gain could not be treated as gain that was returned as income.
Furthermore, none of the
excluded gain is subject to the alternative minimum tax.
"MAGI does not include tax-exempt income,
excluded gain on the sale of a principal residence, or veteran's benefits."
In addition, 7% of the
excluded gain is considered a preference item for alternative minimum tax (AMT) purposes when the exclusion percentage is 50% or 75%.
In determining the replacement business property's basis,
excluded gain is treated as gain recognized by the taxpayer.
The $500,000 exclusion is available to married taxpayers who file a joint return and if (1) either spouse meets the ownership requirement, (2) both spouses meet the use test, and (3) during the 2 year period ending on the date of sale, neither spouse
excluded gain from the sale of another home.
For QSBS whose holding period begins after December 31, 2000, only 28 percent, rather than 42 percent, of the
excluded gain is considered a tax preference item (I.R.C.
The following policy changes were deemed necessary: (1) help the socially
excluded gain social inclusion by improving their conditions; (2) use education and training to prevent social exclusion; (3) prepare social policies to protect people from and prevent social exclusion; (4) improve existing policies on social exclusion; and (5) plan concrete measures to combat social exclusion.
To be eligible for the exclusion, the taxpayer must not have sold property for which he or she
excluded gain during the two-year period ending on the date of sale.
The IRS concluded in a Chief Counsel Advice memo (CCA) that
excluded gain from the sale of a former principal residence that was converted to rental property is not an item of passive activity gross income and, as such, does not offset any suspended passive losses upon disposition of the property.
