You make the callBy: National Association of Tax Professionals
July 23, 2020

Question: Jasper is single and has lived in a house his father owns for the last five years. He paid the mortgage and property taxes and maintained the upkeep on the home while he lived there. On Feb. 2, 2020, Jasper’s father decided to sell the home. He wants Jasper to report the sale and exclude the gain under §121 because he used the home as his principal residence for all five years ending on the date of sale. Is Jasper able to claim the exclusion under §121 if his father owns the property at the time of sale?

Answer: Yes. If the state where Jasper resides recognizes equitable ownership, he can claim the gain exclusion up to $250,000 for a single taxpayer. In Paul L. Blanton, et ux. v. Commissioner, TC Memo 1998-211, a taxpayer who met the equitable ownership rules was allowed to exclude the gain on sale even though they were not listed on the title of the property that was sold.

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penAbout National Association of Tax Professionals

The National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.

The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.

Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.

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