Members of the Maryland Association of Certified Public...


March 14, 1995

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

Q: Before my wife and I got married in 1993, we each owned a townhome. Following our marriage we sold one of the homes in 1993 and the other in 1994 and bought a single new residence that cost more than the sale price of both townhomes combined. How do we file Form 2119 to postpone taxes on the gain from both of the townhomes? Do we file two 2119 forms -- one for each house sold -- and list half the cost of the new home on each?

A: You and your spouse will need to report the sales of your old homes on separate Forms 2119. Provided that you and your spouse own the replacement home jointly, each of you will report one-half of the cost of the replacement home on each F2119. To defer the gain on the sale of the old homes, one-half of the cost of the replacement home must be equal to or greater than the adjusted sales price of each of the old homes. Attach both Forms 2119 to your tax return even if you file a joint return. See IRS Publication 523 Selling Your Home, for further information.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

To submit a question, call Sundial, The Sun's telephone information service, at (410) 783-1800. In Anne Arundel County call 268-7736, in Harford 836-5028, and in Carroll 848-0338. Using a touch-tone phone, enter 6225 after the greeting. Push 1 to submit a tax question; state the question in full. Push 2 to hear a tax tip. Selected questions will be answered in the Business section. No questions will be answered by phone. Please leave your name and phone number.

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