I'm hoping I can explain this situation in a way that someone understands to help provide some guidance with our tax filing for 2015. I'm looking in your direction, Tom, but I'd love to hear if anyone has gone through something similar.
We sold our previous home to build a new home. On 10/29/15 we closed on the construction loan for our new home. We carried the construction loan and previous mortgage until 12/4/15 when we closed on the sale of our previous home. Daycare was registered and active up until 12/4/15. At that point, we moved to an apartment and Daycare was suspended until our new house was completed and the Daycare was registered and started up again on 2/8/16 in the new construction home. On 2/12/16 we converted our construction loan to a permanent mortgage.
Yes, it was all the nightmare it sounds it was...
That being said, my question comes in the form of how to represent this on our 2015 Taxes. I have two questions:
1. Our gain on the sale of the previous home was less considerably than $500,000 so I don't believe I am responsible to claim the profit against our taxes. I do know that I need to look back at depreciation for the past 5 years, but how do I need to handle this information on the taxes? Do I report all monies recorded as depreciation deductions as income this year?
2. When we started the construction loan process, the daycare was in full swing. Is it possible to deduct the expenses related to building the house as you would against a conventional mortgage? Is there anywhere that provides guidance on what can/can't be deducted?
I've looked around our area for a Tax Professional who is well-versed in Home Daycare tax rules but have been unable to find one. I don't typically have issues with reporting our taxes (we have it down to a science now) but this is an unusual situation for us.
Thank you!
We sold our previous home to build a new home. On 10/29/15 we closed on the construction loan for our new home. We carried the construction loan and previous mortgage until 12/4/15 when we closed on the sale of our previous home. Daycare was registered and active up until 12/4/15. At that point, we moved to an apartment and Daycare was suspended until our new house was completed and the Daycare was registered and started up again on 2/8/16 in the new construction home. On 2/12/16 we converted our construction loan to a permanent mortgage.
Yes, it was all the nightmare it sounds it was...
That being said, my question comes in the form of how to represent this on our 2015 Taxes. I have two questions:
1. Our gain on the sale of the previous home was less considerably than $500,000 so I don't believe I am responsible to claim the profit against our taxes. I do know that I need to look back at depreciation for the past 5 years, but how do I need to handle this information on the taxes? Do I report all monies recorded as depreciation deductions as income this year?
2. When we started the construction loan process, the daycare was in full swing. Is it possible to deduct the expenses related to building the house as you would against a conventional mortgage? Is there anywhere that provides guidance on what can/can't be deducted?
I've looked around our area for a Tax Professional who is well-versed in Home Daycare tax rules but have been unable to find one. I don't typically have issues with reporting our taxes (we have it down to a science now) but this is an unusual situation for us.
Thank you!
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