Instructions For Form N-103 - Sale Of Your Home - 2012

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STATE OF HAWAII — DEPARTMENT OF TAXATION
INSTRUCTIONS
2012
FORM N-103
INSTRUCTIONS FOR FORM N-103
(REV. 2012)
Sale of Your Home
(NOTE: References to “married”, “unmarried”, and “spouse” also means “in a civil union”, “not in a civil union”, and “civil union partner”, respectively.)
poration, the ownership and use tests are met if,
Gain (or Loss), Exclusion, and
General Instructions
during the 5-year period ending on the date of
Taxable Gain (Part II)
Who Must File.—Use Form N-103 to report the
sale, you:
sale of your main home, whether or not you had a
Maximum Exclusion
1. Owned the stock for at least 2 years, and
gain from the sale. A loss is not deductible. Attach
You can exclude up to $250,000 of the gain
2. Lived in the house or apartment that the stock
Form N-103 to Form N-11 or N-15 for the year of
(other than gain allocated to periods of nonquali-
entitles you to occupy as your main home for at
sale.
least 2 years.
fied use) on the sale of your main home if all of the
If you are not required to file an income tax re-
following are true:
Exceptions to Ownership and Use Tests
turn for the year of sale, file Form N-103 by itself.
1. You meet the ownership test.
The following sections contain exceptions to the
Send Form N-103 to:
2. You meet the use test.
ownership and use tests for certain taxpayers.
Hawaii Department of Taxation
3. During the 2-year period ending on the date of
Exception for individuals with a disability.
P. O. Box 3559
the sale, you did not exclude gain from the sale
There is an exception to the use test if:
Honolulu, Hawaii 96811-3559
of another home.
1. You become physically or mentally unable to
If Form N-103 is being filed by itself, enter your
For details on gain allocated to periods of non-
care for yourself, and
name and address and sign and date the form.
qualified use, see Nonqualified Use, later.
2. You owned and lived in your home as your main
If you and another person owned the home
Main Home.—You file Form N-103 only for the
home for a total of at least 1 year during the
jointly but file separate returns, each of you can
sale of your main home. It can be a house, house-
5-year period before the sale of your home.
exclude up to $250,000 of gain from the sale of
boat, mobile home, cooperative apartment, con-
Under this exception, you are considered to live
your interest in the home if each of you meets the
dominium, etc. If you have more than one home,
in your home during any time within the 5-year pe-
three conditions just listed.
your main home is ordinarily the one you live in
riod that you own the home and live in a facility
most of the time.
You may be able to exclude up to $500,000 of
(including a nursing home) that is licensed by a
the gain (other than gain allocated to periods of
In addition to your living in your home most of
state or political subdivision to care for persons in
the time, other factors are relevant in determining
nonqualified use) on the sale of your main home
your condition.
if you are married and file a joint return and meet
if that home is your main home. Those factors in-
If you meet this exception to the use test, you
the requirements listed in the discussion of the
clude the following:
still have to meet the 2-out-of-5-year ownership
special rules for joint returns, later, under Married
1. Your place of employment.
test to claim the exclusion.
Persons.
2. The location of your family members’ main
Previous home destroyed or condemned. For
home.
Ownership and Use Tests
the ownership and use tests, you add the time you
3. Your mailing address for bills and correspon-
To claim the exclusion, you must meet the own-
owned and lived in a previous home that was de-
dence.
ership and use tests. This means that during the
stroyed or condemned to the time you owned and
4. The address listed on your:
5-year period ending on the date of the sale, you
lived in the replacement home on whose sale you
a. Federal and state tax returns,
must have:
wish to exclude gain. This rule applies if any part
b. Driver’s license,
1. Owned the home for at least 2 years (the own-
of the basis of the home you sold depended on
c. Car registration, and
ership test), and
the basis of the destroyed or condemned home.
d. Voter registration card.
2. Lived in the home as your main home for at
Otherwise, you must have owned and lived in the
5. The location of the banks you use.
least 2 years (the use test).
same home for 2 of the 5 years before the sale to
6. The location of recreational clubs and religious
Exception. If you owned and lived in the property
qualify for the exclusion.
organizations you are a member of.
as your main home for less than 2 years, you can
Members of the uniformed services or Foreign
How To Obtain Tax Forms.—To request tax forms
still claim an exclusion in some cases. The maxi-
Service, employees of the intelligence commu-
by mail, you may call 808-587-4242 or toll-free at
mum amount you may be able to exclude will be
nity, or employees or volunteers of the Peace
1-800-222-3229.
reduced. See Reduced Maximum Exclusion, later.
Corps. You can choose to have the 5-year test
Tax forms are also available on the Internet. The
period for ownership and use suspended during
Period of Ownership and Use
Department of Taxation’s site on the Internet is:
any period you or your spouse serve on qualified
The required 2 years of ownership and use dur-
official extended duty as a member of the uni-
ing the 5-year period ending on the date of the sale
formed services or Foreign Service of the United
Excluding the Gain
do not have to be continuous nor do they have to
States, or as an employee of the intelligence com-
occur at the same time.
You may qualify to exclude from your income
munity. You can choose to have the 5-year test
You meet the tests if you can show that you
all or part of any gain from the sale of your main
period for ownership and use suspended during
owned and lived in the property as your main
home. This means that, if you qualify, you will not
any period you or your spouse serve outside the
home for either 24 full months or 730 days (365
have to pay tax on the gain up to the limit de-
United States either as an employee of the Peace
x 2) during the 5-year period ending on the date
scribed under Maximum Exclusion. To qualify, you
Corps on qualified official extended duty or as an
of sale.
must meet the ownership and use tests described
enrolled volunteer or volunteer leader of the Peace
later.
Temporary absence. Short temporary absences
Corps. This means that you may be able to meet
You can choose not to take the exclusion by
for vacations or other seasonal absences, even if
the 2-year use test even if, because of your ser-
including the gain from the sale in your gross in-
you rent out the property during the absences, are
vice, you did not actually live in your home for at
come on your tax return for the year of the sale. To
counted as periods of use.
least the required 2 years during the 5-year period
do so, complete all the lines in Part I, and lines 8
ending on the date of sale.
Ownership and use tests met at different times.
through 12 in Part II. Enter the gain on the Capital
If this helps you qualify to exclude gain, you can
You can meet the ownership and use tests during
Gain/Loss Worksheet in the Instructions for Form
choose to have the 5-year test period suspended
different 2-year periods. However, you must meet
N-15. Form N-11 filers should include the gain
by filing a return for the year of sale that does not
both tests during the 5-year period ending on the
on Form N-11, line 10 (if not already included on
include the gain.
date of the sale.
Form N-11, line 7).
Period of suspension. The period of suspension
Cooperative apartment. If you sold stock as a
cannot last more than 10 years. Together, the 10-
tenant-shareholder in a cooperative housing cor-

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