Capital gains to be used for making house accessible for handicapped wife?

[teachwithgames_com]

I sold a duplex and bought two condos for less than the sale price I want to use the gains to put an elevator in my house for my handicapped wife. Is there a way to do that or is it too late to get another property or do I just give my hard work to the IRS?

 Patrick

[AlexanderS08]

The timing of when you sold the duplex and when you bought the two condos is critical in determining whether you can defer the gain.

If you identified the condos within 45 days of the sale of the duplex and then closed on the condos within 180 days of the sale of the duplex, you are able to defer the gain using Form 8824, which is included with TurboTax Premier and TurboTax Self-Employed.

If you were not within those time periods then regrettably you will have to report the gain for the year. 

[teachwithgames_com]

Thanks for the reply.

Today we filled out 1031 inside TurboTax.

We did buy within 180 days (2 TH- $181K), the duplex sold for $290K in June 2019 (cost basis ~$258K). We found the properties within the 45 days, is that "identifying" them?

Did our purchases "defer" ... Can we fill out a form, buy another place and not pay the 10K+ federal tax?

Is an elevator tax-deductible for 2020 (my wife is on SSDI with an MS Diagnosis)?

Thank you for your help/time with this,

Patrick

[ThomasM125]

You need to keep in mind that with a like kind exchange, you would have to have an intermediary hold the sale proceeds you used to purchase the new house. It is not sufficient to sell the house and buy another one within the allowed period of time, you also have to have someone hold the proceeds so they are not available to be used for anything during the holding period.

You can deduct the elevator as a medical expense if the primary purpose is for medical treatment or to help someone who is disabled.

[teachwithgames_com]

We haven't filed yet. Is 1031 the wrong form, since we did not have the funds 'held'? 

How do we find the form 8824 you spoke of?

Will that work for our situation?

thanks, Patrick

[JulieS]

Form 8824 is the form that is used to report a Section 1031 exchange, so that is not an option for you. You will need to report your gains and then deduct the elevator as a medical expense.