If not excluded, then it’s generally covered.  

-Business pays income tax on whatever is left after that, which excludes the $80K.Does this makes sense? 

Therefore supply will be in a real odd space for a while excluding a few outlier areas or states.

Good morning,I'm selling a rental property which is excluded from capital gains tax under the primary residence exemption.

Notably, the landlord is able to exclude the cancelled debt from income due to insolvency at the time of foreclosure. checkout this IRS publication to learn more: https://www.irs.gov/pub/irs-wd/1415002.pdf

I specifically excluded *bonus* from that prior post for that very reason of ineligibility, however, if the cost seg carves out 20% of the basis as 5-year, 20% as 7-yr, 20% as 15-year and the remainder as 39 year (assuming commercial), that’d still front one heck of a depreciation deduction using MACRS 200% DDB.Will still be some net gain, but that would dramatically dramatically reduce the cash he’d have to fork out to uncle sam… PLUS … he’d have new depreciation again!

You should know the rules inside out or be working with the professionals that know it.Incorrect moves can result in not only a taxable event to you but to your investors.Based on your most recent response, i do not think you have a good understanding of1) requirements of the QOF(You may need to substantially improve a property)2) How long you need to hold a property before it can be sold to exclude the gain3) Inside basis vs outside basisBest of luck

For those curious, if this applies to them, just follow these general principals: To qualify for the Section 121 exclusion you must: Must live in the home in the past 2 of the 5 years 24 months non consecutive required Must have owned the home for at least 2 years Only one spouse needs to meet the ownership testBoth spouses need to meet the use test Neither spouse has excluded a gain / used section 121 in the past two years Must file jointly for the 500k exclusion

What are other, non-tax, consequences and risks of excluding one of the spouses from the legal ownership?

If more than 2 years, you probably can exclude up to $500k in gains, assuming you are married.