All Forum Posts by: Kasha Williamson

thank you both very much! 

My purchase is $25k under the net of the STR sale, would like to use that $25K to do some landscaping improvements (trees/fencing) and to furnish the STR. May I use that $25k difference to do so, and if so how does my QI distribute ?

Thank you.

Property used as home.

If the property given up was owned and used as your home for at least a total of 2 years during the 5-year period ending on the date of the exchange, you may be able to exclude part or all of any gain figured on Form 8824. For details on the exclusion of gain (including how to figure the amount of the exclusion), see Pub. 523, Selling Your Home. Fill out Form 8824 according to its instructions, with the following exceptions.

1. Subtract line 18 from line 17. Enter that result on line 19. On the dotted line next to line 19, enter “Section 121 exclusion” and the amount of the exclusion.
2. On line 20, enter the smaller of:
   1. Line 15 minus the exclusion, or
   2. Line 19.

      Don't enter less than zero.

3. Subtract line 15 from the sum of lines 18 and 23. Add the amount of your exclusion to the result. Enter that sum on line 25.

If the property given up was used partly as a home, and partly for business or investment, you will need to use two separate Forms 8824 as worksheets. Use one worksheet for the part of the property used as a home, and the other worksheet for the part used for business or investment. Fill out only lines 15 through 25 of each worksheet Form 8824. On the worksheet Form 8824 for the part of the property used as a home, follow steps (1) through (3) above, except that instead of following step (2), enter the amount from line 19 on line 20. On the worksheet Form 8824 for the part of the property used for business or investment, follow steps (1) through (3) above only if you can exclude at least part of any gain from the exchange of that part of the property; otherwise, complete the form according to its instructions. Enter the combined amounts from lines 15 through 25 of both worksheet Forms 8824 on the Form 8824 you file. Don't file either worksheet with Form 8824.

For details, see Rev. Proc. 2005-14, 2005-7 I.R.B. 528, available at IRS.gov/irb/2005-07_IRB/ar10.html.

Additional information.

For more information on like-kind exchanges, see section 1031 and its regulations and Pub. 544.