Deemed Sale Question for Taxjunkie
I sold a couple of my rental units in 2002. The capital gains bite is worse than I anticipated. If I had "deemed" a sale of these properties on my 2001 return, my tax liability would be much better for 2002. I had unused passive losses in 2001 that could offset the capital gains from the deemed sale, with no change in my tax liability for that year.
My question is: Am I allowed to file an amended 2001 return to take advantage of the "deemed sale" rules for that year, or is the window now closed for making that declaration?
Quote:
On 2003-04-11 04:06, DaveT wrote:
I sold a couple of my rental units in 2002. The capital gains bite is worse than I anticipated. If I had "deemed" a sale of these properties on my 2001 return, my tax liability would be much better for 2002. I had unused passive losses in 2001 that could offset the capital gains from the deemed sale, with no change in my tax liability for that year.
My question is: Am I allowed to file an amended 2001 return to take advantage of the "deemed sale" rules for that year, or is the window now closed for making that declaration?
Dave:
I am pretty sure you are out of luck. I don't have my Treasury Regulations at home with me, but my recollection is that the deemed sale election would have had to be made in 2001 for you to use the gain in 2001. Filing an amended return will not be effective, because you would be deemed to have made the election in 2003. Send me a private email at my work email (hopefully you still have it). I will try and get back to you after Tuesday (the tax season has me working long hours).
Taxjunkie