The principal residence is probably the one thing that nearly all our clients have in common! So dealing with the tax situations arising from the principal residence is something that crosses our desks almost every day during tax season.
The US government has been extremely generous in giving significant tax advantages for taxpayers lucky enough to own a home, and it’s important for tax preparers to be up to speed on these tax breaks. Canopy’s latest CPE course discusses what differentiates the principal residence from secondary residences, and then reviews the itemized deductions and various credits most commonly associated with the principal residence.
From there we move into the ins and outs of the §121 exclusion, discussing the Ownership Test, the Use Test, and the Look-back Test as they apply to various situations. We also cover the exceptions to the exclusion, the automatic disqualifications for the exclusion, and what situations allow the taxpayer to take at least a partial exclusion. We’ll also examine some examples of a home becoming a rental and vice versa, exploring the tax ramifications of those situations.
Home office depreciation has become increasingly common, as more and more taxpayers work from their homes; understanding how that depreciation works and how it affects the sale of the home is crucial.
This free CPE course will close with a discussion of home foreclosure. We’ll cover how to calculate the sales proceeds in a foreclosure situation and how the §121 exclusion applies to these cases.
Expand your understanding of principal residence taxation with Canopy’s latest tax course: Principal Residence Taxation Issues! Register for the course today.