Deductions & credits
Since you are filing separately, your concern is to be able to verify that you made $250,000 or less in profit. If you are positive it is below $250,000 with no chance of question, don't worry about this at all. Otherwise:
- Determine original cost of house and add any improvements made (new bathroom, fence, etc). divide by 2
- Determine if any depreciation *recapture is required . If so, add up depreciation taken and divide by 2.
If answer 1 minus answer 2 is $250,000 or less, no worries. Do tuck these calculations into your tax folder in case the IRS asks.
If over $250,000 then you will need to file the sale of home.
*depreciation -beginning in 2013, a simplified home office deduction was allowed and no depreciation is required to be recaptured when the home is sold See FAQ #20.
If you are higher income and required to pay AMT, look for the 6251, If no 6251, no AMT difference in depreciation.
Sch C explains to attach 8829 unless you are using the simplified method. You can breeze through your returns and see what forms are involved. Line 30 will be blank with no deduction if there is no positive income.
