Investor · Charlotte, NC · Member since 2016 · 8 posts · 2 votes
This past June I completed a house hack fix and flip which was my first deal. I owned and lived in the property for 4 years - rehabbing along the way, and then sold for a gain less than $250,000. Not sure that this would matter but some added info - the house hack in question was in Pittsburgh, PA and after completion I relocated to Charlotte, NC. I currently rent.
After reviewing the terms of the Section 121 Exclusion, I'm pretty confident that I qualify for the exclusion. I would like to know if I need to fill out/ submit any documentation before the tax year ends to have all of my "ducks in a row" before filing taxes. Any feedback would be appreciated- both confirming that I do in fact qualify, and then also what steps if any do I need to take before year end.
Pittsburgh, PA · Member since 2016 · 43 posts · 11 votes
9y
Bob, pretty sure from the IRS standpoint you owned a primary residence, did some repairs and sold the property, so as long as you have not used this exclusion in the last 2 years you can use it for this transaction. Did you receive a tax form 1099-S from the company that had the mortgage? As long as you filed your taxes and reported the sale and included the 1099 you should be fine. If you don't report it, you may get a letter in the mail from the IRS showing that there was a discrepancy on your tax return and that the money is taxable; I am not a tax expert, only answering this question because I just helped a friend out with a situation where she did not report the sale of her home and had received a nastygram from the IRS. It was easily fixable.
Pittsburgh is a little different with out toilets in the basements and french fries on our salads, but nothing unique about PA from a tax standpoint that I am aware of....