In December of 2021 I sold my previous home after having rented it to family for a couple of years. At closing I signed a Certification For No Information Reporting On The Sale Or Exchange Of A Principal Residence form indicating that I had not lived in the house 2 out of the 5 years prior to sale. My recollection at the time was that this was probably correct but after piecing together my history in that house from emails and other sources, I realize now that I did live in that house 2 out of those 5 years and that I should be eligible to exclude capital gains on the sale. I am assuming that the information on this form has been submitted to IRS (although I did not recieve a 1099-S). I have not yet submitted my 2021 return (I am aware it is past due). Is there any way to amend/reverse what I've incorrectly stated on the Certification form to the IRS prior to submitting that return? Thanks.
contact the closing agent to see what they say. gain to the extent of the depreciation allowed or allowable during the rental period is not eligible for the exclusion.
Thanks, but closing agent will not be of help...his complete response to my emailed inquiry about correcting or amending the Certification form was "Not sure of a method to correct fling but when you do your return just indicate on that it was your primary residence". I'm working with an experienced CPA to do the return so we've worked out what's eligible for exclusion based on the assumption that I occupied the house 2 out of 5 years prior to sale. My only concern is trying to claim the exclusion at all given that I signed a document sent to IRS which basically says I am completely ineligible for it. Is attempting to contact IRS about this of any value here?
Yes, if you can speak to someone at the IRS to explain your situation, that may be helpful. However, if your attempts to reach someone at the IRS prove unsuccessful, then prepare your return that way it should be prepared notwithstanding the Certification form. You need to prepare an accurate return, and if you are eligible to claim the capital gain exclusion, then claim it so that your return is accurate. In the future, you may need to explain to the IRS the conflict between the Certification form and your return; however, it appears you have the documentation you need to show why the Certification is not accurate and why your tax return is accurate.