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Sales of condo and parking spot separately

I purchased my condo apartment and a deeded parking spot in the same building together in 2015. One purchase price with no separate basis for the parking spot. But 2 separate deeds with separate taxes. In 2023, I sold both but separately. The combined gain is under the $500k tax exclusion limit. If I had sold them together, there would be no issue. But because I sold them separately, I got 2 separate 1099-S forms. Do I add the total proceeds of both and enter them under sale of primary home? Or report them separately, in which case what basis do I use for the parking spot in 2015? Essentially, am I being penalized by selling them separately? Thanks!

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1 Reply
DianeW777
Expert Alumni

Sales of condo and parking spot separately

It depends.  The Form 1099-S is not actually entered as a form in TurboTax so you should add them together if you choose to treat both as part of the sale of your home.

 

It could go both ways and so in the end I will provide some details and you will need to make the final decision. Tax law is often determined by deciding if you are willing to use your facts and circumstances to arrive at a reasonable conclusion being prepared for any question later.

 

In IRS Publication 523 there is a 'Vacant Land' description that qualifies: This is being related to the parking spot and considering you both them together would go in your favor.

 

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.

 

As long as the parking spot also meets the two year ownership and use requirements, I would consider treating it as a sale of partial interest in the taxpayer's principal residence under Treasury Reg §1.121-4(e)(1) by also considering it as part of the "dwelling unit" from IRC §280A(f)(1)

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