Where to report gain on short-term sale?

Question

In 2008, I bought and sold a house for investment, making a small profit. Can I report this profit as a short-term capital gain (thus ofsetting other losses) or must I report it as ordinary income?

Where do I report this transaction? The instructions for Form 4797 says I must use Part II: Ordinary Gains and Losses. Must I use Part II of Form 4797 or can I report this transaction directly on Schedule D, or can I use Part III of Form 4797?

Note: I owned this house only a few months, never put it into service, and did not deduct depreciation.

Thank you for your help.

Harlan Lunsford · Accepted Answer

Go directly to schedule d and pass on form 4797.ChEAr$,Harlan Lunsford, EA n LA

removeps-groups · Answer

But what do you have to do to prove that you've held the property forinvestment?  Is there some election to make, etc?

Mark Bole · Answer

Keep records which document the facts and circumstances.-Mark Bole

Arthur Kamlet · Answer

If you filed schedule A reporting the mortgage interest as investmentinterest and not as home mortgage interest, that would be in yourfavor.

Arthur Kamlet · Answer

Some years ago there was a muppet-like TV show called Dinosaurs,

Daddy Dinosaur worked for the largest employer in the area, the "We Say So" corporation.

We Say So works for lots of things.

But seriously, in anoher message I;'ve suggested that declaring the mortgage interest as investment interest on schedule A, rather than home mortgage interest, is one data point that can argue in your favor.

Stuart A. Bronstein · Answer

Basically you have to act like it's for investment purposes.  That means that if someone is using it, charge rent.  Be sure it's properly maintained.  For example.Stu

Where to report gain on short-term sale?

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