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Sara126
New Member

Do I have to deduct the gain deferred on the sale of a primary residence in 1983 from the cost basis of the primary residence we bought in 1983 and sold in 2018?

 
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Coleen3
Intuit Alumni

Do I have to deduct the gain deferred on the sale of a primary residence in 1983 from the cost basis of the primary residence we bought in 1983 and sold in 2018?

Yes.

Prior to 1997, you could elect to postpone the gain on your sale of home if you upgraded a more expensive home. If you still have your physical form, you can check to see if you chose to do so. You may have elected not to. You can see a blank copy of the form below. Part IV would have given you the adjusted basis of the new home you bought, had you elected to postpone the gain.

Per Pub 17:

The records you should keep include: • Proof of the home's purchase price and purchase expenses; • Receipts and other records for all improvements, additions, and other items that affect the home's adjusted basis; • Any worksheets or other computations you used to figure the adjusted basis of the home you sold, the gain or loss on the sale, the exclusion, and the taxable gain; • Any Form 982 you filed to report any discharge of qualified principal residence indebtedness; • Any Form 2119, Sale of Your Home, you filed to postpone gain from the sale of a previous home before May 7, 1997; and • Any worksheets you used to prepare Form 2119, such as the Adjusted Basis of Home Sold Worksheet or the Capital Improvements Worksheet from the Form 2119 instructions, or other source of computations.

https://www.irs.gov/pub/irs-prior/f2119--1991.pdf 

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1 Reply
Coleen3
Intuit Alumni

Do I have to deduct the gain deferred on the sale of a primary residence in 1983 from the cost basis of the primary residence we bought in 1983 and sold in 2018?

Yes.

Prior to 1997, you could elect to postpone the gain on your sale of home if you upgraded a more expensive home. If you still have your physical form, you can check to see if you chose to do so. You may have elected not to. You can see a blank copy of the form below. Part IV would have given you the adjusted basis of the new home you bought, had you elected to postpone the gain.

Per Pub 17:

The records you should keep include: • Proof of the home's purchase price and purchase expenses; • Receipts and other records for all improvements, additions, and other items that affect the home's adjusted basis; • Any worksheets or other computations you used to figure the adjusted basis of the home you sold, the gain or loss on the sale, the exclusion, and the taxable gain; • Any Form 982 you filed to report any discharge of qualified principal residence indebtedness; • Any Form 2119, Sale of Your Home, you filed to postpone gain from the sale of a previous home before May 7, 1997; and • Any worksheets you used to prepare Form 2119, such as the Adjusted Basis of Home Sold Worksheet or the Capital Improvements Worksheet from the Form 2119 instructions, or other source of computations.

https://www.irs.gov/pub/irs-prior/f2119--1991.pdf 

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