Publication 523 - Selling Your Home - 2003 Page 20
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31Worksheet 1. Adjusted Basis of Home Sold —
Illustrated Example 1 for Peter and Betty Clark
Caution: See the Worksheet 1 Instructions before you use this worksheet.
1.
Enter the purchase price of the home sold. (If you filed Form 2119 when you originally acquired that home to
postpone gain on the sale of a previous home before May 7, 1997, enter the adjusted basis of the new home
from that Form 2119.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
$40,000
2.
Seller paid points for home bought after 1990. (See Seller-paid points.) Do not include any seller-paid points
you already subtracted to arrive at the amount entered on line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3.
Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
40,000
4.
Settlement fees or closing costs. (See Settlement fees or closing costs.) If line 1 includes the
adjusted basis of the new home from Form 2119, go to line 6.
a. Abstract and recording fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4a.
b. Legal fees (including title search and preparing documents) . . . . . . . . . . . . . . . . . . . . . . . . 4b.
250
c. Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4c.
d. Title insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4d.
e. Transfer or stamp taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4e.
f. Amounts that the seller owed that you agreed to pay (back taxes or interest, recording or
mortgage fees, and sales commissions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4f.
g. Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4g.
5.
Add lines 4a through 4g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
250
6.
Cost of additions and improvements. Do not include any additions and improvements included on line 1 . . . . 6.
2,000
7.
Special tax assessments paid for local improvements, such as streets and sidewalks . . . . . . . . . . . . . . . . . 7.
8.
Other increases to basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9.
Add lines 3, 5, 6, 7, and 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
42,250
10.
Depreciation, related to the business use or rental of the home, claimed (or allowable) . . . . . 10.
11.
Other decreases to basis (See Decreases to basis.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12.
Add lines 10 and 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13.
ADJUSTED BASIS OF HOME SOLD. Subtract line 12 from line 9. Enter here and on Worksheet 2, line 4 . . . 13.
$42,250
Worksheet 2. Gain (or Loss), Exclusion, and Taxable Gain —
Illustrated Example 1 for Peter and Betty Clark
Part 1 – Gain (or Loss) on Sale
1.
Selling price of home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.
$395,000
2.
Selling expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.
25,000
3.
Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.
370,000
4.
Adjusted basis of home sold (from Worksheet 1, line 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.
42,250
5.
Subtract line 4 from line 3. This is the gain (or loss) on the sale. If this is a loss, stop here . . . . . . . . . . . . . .
5.
327,750
Part 2 – Exclusion and Taxable Gain
6.
Enter any depreciation allowed or allowable on the property for periods after May 6, 1997. If none, enter zero
6.
0
7.
Subtract line 6 from line 5. (If the result is less than zero, enter zero.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.
327,750
8.
If you qualify to exclude gain on the sale, enter your maximum exclusion. (See Maximum Exclusion.) If you do
not qualify to exclude gain, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.
500,000
9.
Enter the smaller of line 7 or line 8. This is your exclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.
327,750
10.
Subtract line 9 from line 5. This is your taxable gain. Report it as described under Reporting the Sale. If the
amount on this line is zero, do not report the sale or exclusion on your tax return. If the amount on line 6 is
more than zero, complete line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
0
11.
Enter the smaller of line 6 or line 10. Enter this amount on line 12 of the Unrecaptured Section 1250 Gain
Worksheet in the instructions for Schedule D (Form 1040) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
Page 20
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