Out of Scope Situations for VITA/TCE

The following are out of scope for this lesson. While this list may not be all inclusive, it is provided for your awareness only.

• Taxpayers who have sold any assets other than stock, mutual funds, or a personal residence
• Taxpayers who trade in options, futures, or other commodities, whether or not they disposed of any during the year
• Taxpayers who must answer Yes to the digital assets (virtual currency) question on Form 1040
• Determination of basis issues:
  • Basis of any asset acquired other than by purchase or inheritance, such as a gift or employee stock option, unless the taxpayer provides the basis and holding period
  • Basis of inherited property determined by method other than the fair market value (FMV) of the property on the date of the decedent's death, unless the taxpayer provides the basis and holding period
• Like-kind exchanges and worthless securities
• Form 1099-B, boxes with entries for any of the following: Bartering; Profit or (loss) realized on closed contracts; Unrealized profit or (loss) on open contracts – prior year; Unrealized profit or (loss) on open contracts – current year; or Aggregate profit (loss) on contracts; Proceeds from collectibles; or FATCA filing requirement
• Reduced exclusion computations/determinations for the sale of a home
• Married homeowners who do not meet all requirements to claim the maximum exclusion on sale of home
• Decreases to basis, including:
  • Deductible casualty losses and gains a taxpayer postponed from the sale of a previous home before May 7, 1997
  • Depreciation during the time the home was used for business purposes or as rental property
• Taxpayers with "nonqualified use" issues
• Sale of a home used for business purposes or as rental property