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Distributor's Link Magazine Fall 2021 / Vol 44 No 4


52 THE DISTRIBUTOR’S LINK Roman Basi Roman Basi is the President of The Center for Financial, Legal & Tax Planning, Inc. Roman graduated from Milliken University obtaining a Bachelor’s of Science Degree with a minor in Psychology. He earned an MBA from Southern Illinois University with an emphasis in Accounting and recevied his JD degree from Southern Illinois University. Roman is a licensed CPA as well as being a licensed attorney in Illinois, Missouri and Florida and is in high demand for his expertise in financial, legal and tax matters. His areas of expertise include mergers and acquisitions, contracts, real estate law, tax and estate planning. THE PERSONAL HOME EXCLUSION: ENSURING YOUR HOME SALE ISN’T EXCLUDED FROM THIS TAX BENEFIT It’s time to sell your home. For many people, this is an exciting event that symbolizes a new chapter in life. What makes this even more exciting is that, under Internal Revenue Code (IRC) Section 121, sellers can exclude up to 0,000 of the gain from the sale of their residential home (or up to 0,000 if a married couple who files joint tax returns is selling). However, like any other tax break, the personal home exclusion has a strict set of rules that must be precisely followed in order for your sale to qualify. Failure to maintain your home ownership within the parameters of these rules can disqualify your sale from the tax exclusion, costing you thousands of dollars in taxes. Let’s consider the many facets of these requirements to ensure your home sale will qualify. Preliminarily, the exclusion only applies to the sale of your principal residence. You can only have one principal residence at a time, which the IRS determines with a “facts and circumstances” test. Take these steps to ensure you sell your “principal residence” if you own multiple residential properties: list this home address on relevant documents (voter ID card, tax returns, driver’s license, and USPS address). Join a bank and become a member in clubs and groups near this home. Work and CONTRIBUTOR ARTICLE reside there if you can. While not all of these factors must be present, the more you can associate with the home, the better. The IRS has promulgated an “Eligibility Test.” The first step is “automatic disqualification” which you will want to avoid. If you acquired your home through a 1031 exchange within the past 5 years you will fail this first step. The second automatic disqualification is being subject to expatriate tax. Second is “ownership,” which can be more complicated than it sounds. You must own the home for at least two out of the past five years immediately before the sale. But what does it mean to “own” the home? First, if you as an individual or at least one of two spouses owns the home outright, you pass the test. If you own only a remainder interest, the sale will only qualify if the buyer is not a related party and you have not already sold an interest in the home What if the home is owned by a business? A single-owner entity that is not treated separately from its owner for tax purposes, such as an LLC, can sell a residence and qualify for the exclusion. The sale by the entity is treated as a sale by the owner since the entity is not treated separately from the owner for other tax purposes. CONTINUED ON PAGE 134

MW COMPONENTS TEL 203-888-2133 EMAIL WEB INTRODUCING: MW COMPONENTS MW Industries recently consolidated 21 of its component manufacturing businesses including, RAF, Century Spring, and ASM, under a single umbrella: MW Components. MW Components is on a mission to help manufacturers accelerate and simplify the process of creating, buying, and managing the complex task of acquiring the precision parts they need. From a custom component designed for a specific application to a stock part from one of the country’s largest inventories, this can now be accomplished through a single trusted supplier. Same Experts, an Expanded Value Offering MW Components’ businesses specialize in producing a wide variety of parts, including springs, fasteners, bellows, couplings, and practically any custom-designed parts manufacturers could require. 20+ manufacturing facilities house state-of-the-art production equipment capable of producing standard and precision components fit for various industries, including aerospace, automotive, BUSINESS FOCUS ARTICLE THE DISTRIBUTOR’S LINK 53 electronics, energy, and more. Additionally, they employ more than 100 specialized engineers ready and able to provide expert advice on design for manufacturability, cost, and performance. Combining these businesses opens valuable access to knowledge, expertise, and innovations from across the entire breadth of MW’s facilities. More importantly, it streamlines designing, ordering, and managing multiple components from one supplier, which offers a tangible speed advantage regardless of the part’s application. Providing Supply Chain Resilience Today’s uncertain economic situation has many manufacturers re-examining their supply chains. Many are focusing on consolidating their vendors to add resilience and avoid costly delays and added downtime created by disrupted global supply routes. As a well-funded US-based business, MW Components can offer the size, scale, and reach to ensure an uninterrupted supply of precision components. MW COMPONENTS


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