Disaster Gains Articles Requested

 
North Bay Chapter's CalFireTaxInfo.org website needs your help! Many of the Enrolled Agents dealing with fire victims are seeing that their clients have GAINS on the loss of their properties. There is little published about how to do gain calculations and/or the examples are very simplistic and not useful to our Members. So, the CalFireTaxInfo.org editors would like a handful of articles that deal with real world calculations for handling these gains.
 
Specifically, they are requesting four articles that briefly discuss the issue and have a calculation with numbers:
 
  1. How to handle a primary residence lost in the fire. There is residual land value. Insurance payout is greater than basis so there is a casualty gain. Taxpayer sells the lot, pays off mortgage on destroyed home, and buys a new home and gets a new mortgage.
  2. How to handle a rental lost in the fire. There is residual land value. Insurance payout is greater than basis so there is a gain. Taxpayer rebuilds. What is the basis of the new rental?
  3. Can a taxpayer take the Section 121 exclusion on the same property? For example, if they qualify and take a Section 121 exclusion on the home that was destroyed, then rebuild and live in the new house for two of the five years, can they take the 121 again on the same property?
  4. Interaction of Section 121 and Section 1033 on a property. For example, maybe they lived in the property for only one year and then it burned down. Calculations for taking the partial 121 and electing 1033./li>
It would be great if you could comment on the differences if the property is located in a presidentially declared disaster area versus not. Of course, if you are handling a scenario on your own and want to send the editors a brief write-up about it, that would be much appreciated!
 
Please send your articles to Madelyne Cromwell, EA at madelyne@cromwelltaxandbooks.com.
 
Thank you!