Question

List at least one reason why: The seller of a home might wish to elect out of the IRC section 121 exclusion An owner of depreciable real property might consider electing the alternative depreciation system of IRC section 168(g)

Answer 1

Solution:

In Terms of First Case, The Exclusions for Section 121 Applies Only and Only to Residential House Property With a Condition that the Taxpayer Should utilize the same throughout the previous two years out of 60 months(i.e 2 years out of 5 years)

In Terms of First Case, The Exclusions for Section 121 Applies Only and Only to Residential House Property With a Condition that the Taxpayer Should use the same for the last 24 months out of 60 months(i.e 2 years out of 5 years)
The Seller of A house Might wish to Opt out of Section 121 As:-
1. If the Property is not used for residential Purpose.
2. Not Used for 2 Years out of 5 Years.
In the Second case Section 167 Applies and Let U take the Depreciation Benefit as a Normal Method. and 168(g) will applies for Accelerated Depreciation.
Accelerated Depreciation will Consider good in Business Purpose. If the Owner not uses the same for business Purpose then he Should Opt Out of the same