How to report sale of lot and transfer of mobile chalet?

[elintx]

My Texas client sold his Colorado vacation lot and his mobile chalet (not permanently attached to lot) in 2021. The chalet and lot were never rented out or used for business.  The 1099-S only shows the sale price of the lot.  The chalet is shown on the settlement statement as a transfer under miscellaneous charges and not included on the 1099-S but the buyer paid a fee for the transfer of the chalet from my seller.  How do I report this on his Federal return?  Do I show these as 2 separate sales or do I just combine the 2 into 1 lump sum sale?

[qbteachmt]

I suspect (without looking into CO laws) you have a "vehicle" transfer. You stated mobile, which is like "tiny home on a flatbed trailer." That's more like an RV, in other words.

[elintx]

I called the title company and they said it's like a "vehicle" transfer fee that the seller received money for at a gain to the original price paid by seller to transfer title to the chalet on wheels to the buyer and the buyer goes to DMV to get the title in their name.  Still not clear about how to report this transaction so I'll call CO DOR to find out how it should be shown.

[qbteachmt · Accepted solution]

"Still not clear about how to report this transaction"

Like an RV trailer.

[elintx]

Yes, I get it for federal that it's a capital gain for personal property.  I'm now trying to decide if CO considers the mobile chalet as personal property for the Colorado Capital Gain Subtraction.  Can't get a hold of anyone at the CO DOR to ask.  I know real property acquired after June 2009 isn't eligible for the subtraction but personal property still is.  He met all the requirements for taking the capital gain subtraction on personal property.  Does anyone know if it's eligible for the capital gain subtraction as personal property on the CO income tax return?  Thanks.

[qbteachmt]

Your analysis considers this "camping trailer" got sold with a gain?

[sjrcpa]

Possible I guess. I hear some used cars and trucks are selling for more than their original cost due to supply shortages.

[sjrcpa]

If you have to register it with the DMV it is personal property like a car is

[elintx]

This is a ritzy park in CO where the chalets look like log cabins but are very small and still on wheels but they put a skirt around them to make them look like they're on a foundation.  So someone could move the chalet off the lot and place it elsewhere if they wanted to do so.  It's unbelievable what these tiny homes go for.  And yes it is perfectly clear that he had a gain on sale even after he made some improvements to the chalet.

[elintx]

Look up Tiger Run Resort Park in Breckenridge, CO to see if there are any chalets for sale.  Sumter county values the lot like 9 times what the chalet is valued at for real estate taxes.

[elintx]

I'm filing for the capital gain subtraction on the gain on sale of the mobile chalet.  IMHO, it's personal property.  All the CO DOR can do if they don't agree is reduce his refund.