sale of land a mobile home occupies

[inctaxkwatkins]

I have a client that owns a mobile home and the land it sits on. The mobile home is located in Ranchero Village in Largo, FL. The entire property was sold for $53.7 million to a global investment company from Met Life Insurance Company. My clients share of the sales proceeds was $371,000 and his share cost was $55,000. They owned and occupied the property for at least 2 of the last 5 years and are filing a joint return.  The mobile home was originally considered real property, but is now been reclassified to titled or registered property since it was not sold and the owners are now paying lot rent.

Does this transaction qualify my clients to claim the home sale capital gains exclusion on the gain on the sale of the land?

Also, a 1099S was not provided to my clients, therefore, if the sale qualifies for the exclusion, I am under the impression that the sale does not need to be reported on the tax return. 

Your advice is greatly appreciated, and I thank you in advance for your guidance regarding this matter.

[pk]

@inctaxkwatkins 

(a) you know you cannot use TurboTax to prepare returns for clients ( paid use )

(b)  as I understand the situation --- Taxpayer sold the land underneath the main home and assuming  all other eligibility conditions are met , want to exclude  :main residence sale " gain.

(c) The problem here is  that the main-home  continues to be used as main  home .

Main home  eligibility is based on   ( Pub 523 and section 121 of IRC )  -- US Post address;  Driver's license;  Voter Registration;  connection to  other  things like job, banking etc.  Thus it is use based.   And the  assumption is  that land on which the residence rests is part and parcel of the  home  and is sold as an unit.  This is not the case here.

(d) the nearest reference I can see is in Pub 523 :

"  

Vacant land next to home.

You can include the sale of vacant land adjacent to the land on which your home sits as part of a sale of your home if ALL of the following are true.

• You owned and used the vacant land as part of your home.

• The sale of the vacant land and the sale of your home occurred within 2 years of each other.

• Both sales either meet the Eligibility Test or qualify for partial tax benefits, as described earlier.

Also, if your sale of vacant land meets all these requirements, you must treat that sale and the sale of your home as a single transaction for tax purposes, meaning that you may apply the exclusion only once.

Note. 

However, if you move your home from the land on which it stood (meaning you relocate the actual physical structure), then that land no longer counts as part of your home. For example, if you move a mobile home to a new lot and sell the old lot, then you can’t treat the sale of the old lot as the sale of your home.

 Thus my conclusion is because they have not sold the  " home" but just the land underneath, this  will not qualify for  EXCLUSION of GAIN.

That is my opinion