Publication 523 - Selling Your Home - 2003 (Page 21 of 31) in pdf

Example 2. The facts are the same as in Example 1,

the remaining gain of $152,750 ($652,750 – $500,000) on

except that Peter and Betty Clark sold their home for

Schedule D (Form 1040). Their completed Worksheet 2

$695,000 and they had no selling expenses. Their gain on

appears next. (Worksheet 1 remains the same as shown in

the sale is $652,750. Since they are married, meet the

Example 1.) The front page of the Clarks’ Schedule D

ownership and use tests and file a joint return for the year,

follows.

they qualify to exclude $500,000 of the gain. They report

Worksheet 2. Gain (or Loss), Exclusion, and Taxable Gain —

Illustrated Example 2 for Peter and Betty Clark

Part 1 – Gain (or Loss) on Sale

Selling price of home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$695,000

Selling expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

695,000

Adjusted basis of home sold (from Worksheet 1, line 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42,250

Subtract line 4 from line 3. This is the gain (or loss) on the sale. If this is a loss, stop here . . . . . . . . . . . . . .

652,750

Part 2 – Exclusion and Taxable Gain

Enter any depreciation allowed or allowable on the property for periods after May 6, 1997. If none, enter zero

Subtract line 6 from line 5. (If the result is less than zero, enter zero.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

652,750

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- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

500,000

Enter the smaller of line 7 or line 8. This is your exclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

500,000

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.

152,750

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.

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Publication 523 - Selling Your Home - 2003 Page 21