Hi,
I rent out part of my home and sold it in 2020. I'm trying to determine if I should/can take the Safe Harbor Election for Small Taxpayers for my $2500+ improvements or if they just get calculated into the cost basis when I report the sale. In trying to figure out if I qualify for this election, I'm not sure what they mean by "gross receipts" here. The pop-up explanation in the desktop version of TurboTax says it refers to:
"your average annual gross receipts for the past three tax years, which need to be below or equal to $10,000,000 for this election."
and that
"Gross receipts include sales amounts for all rental or business activities. They are not reduced by cost of goods sold or business or rental expenses. Gross receipts also include wages, interest (including tax-exempt interest), dividends, royalties, annuities, Social Security income, pension or retirement plan distributions, and unemployment compensation."
So do they just mean receipts for the rental? Or when it says "wages" etc, do they mean I should include my personal wages (i.e. adjusted gross income)?
Thanks in advance for timely responses!
