How is the number of days property owned calculated on the sale of home worksheet Form 4797

Forum|Forum|4 years ago
January 26, 2022
2 replies
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The Worksheet for sale of a home with disqualified business use on Form 4797 includes line 9 "Number of days taxpayer owned the property". This number is the denominator for the % of gain allocated to nonqualifed use. Where is this value coming from? It is resulting in a higher allocation as nonqualified of the gain exclusion.

Lacerte Tax

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Best answer by George4Tacks

Are you doing the sale of a personal residence through the depreciation screen 22? If so, don't

Just put in date of sale and use the information from the depreciation schedule to enter the sale of home in the Schedule D (Screen 17) input.

In Screen 17 > Sale of Home > there is input for Business Use The percentages should be coming from that input.

T

TaxGuyBill

Level 15

@Diana1 wrote:

Where is this value coming from? It is resulting in a higher allocation as nonqualified of the gain exclusion.

Are you saying it is auto-populating?

If it is auto-populating, I would THINK it would based on the "acquisition date".

But then you said it is resulting in a higher allocation. Are you saying that number is larger than the actual number of days the taxpayer owned the property?

D

Diana1Author

Level 2

It is auto-populated and appears to result from the date placed in service - however when the taxpayers ownership preceded the date placed in service by two years. So the exclusion is lower than I expect and the nonqualifed exclusion too high.

T

TaxGuyBill

Level 15

As you pointed it, the number of days should be larger. I use ProSeries, so I can't check if there is another spot to enter it, but you are correct, that number should be larger. If there isn't an entry spot for the "acquisition date" (which in your case is a different date than the "placed in service" date), you may need to override the auto-populated field.

George4TacksAnswer

Level 15

Are you doing the sale of a personal residence through the depreciation screen 22? If so, don't

Just put in date of sale and use the information from the depreciation schedule to enter the sale of home in the Schedule D (Screen 17) input.

In Screen 17 > Sale of Home > there is input for Business Use The percentages should be coming from that input.

Answers are easy. Questions are hard!

D

Diana1Author

Level 2

Thanks, George.

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