Originally Posted by
GrenadaRoger
you've got a complex situation because your parents are co-owners with you...best to meet with a tax preparer or attorney...i don't know the rules for sales of co-owned homes, but it has happened before and there is a protocol to follow.
re: the non-co owned home sale, i've been retired for a few years now so i am rusty...but as i recall there is an ownership test and a residence test, and if you meet those conditions when you sell your house can exempt $250,000 of gain...if less than 2 years I believe a portion can be exempted--depends of length of time...also in limited cases the circumstances leading to the sale ( i. e., involuntary conversion) may give relief. Further, if you owned the house for more than a year the gain qualifies for long-term capital gain, which is usually taxed at lower rates than regular taxable income.
here is the irs info sheet on sale of home gain exclusion
https://www.irs.gov/taxtopics/tc701 (read it)
and here is the sheet for capital gains
https://www.irs.gov/taxtopics/tc409 (read that too)
if the sale just happened in January you have until 2024 April 15 to work on this problem...if in 2022, you need to pay 90% of your ultimate liability by April 15, 2023 and then pay the balance when you file your return or October 15, whichever is earlier (that is, go on extension)...if you can't pay then request a payment plan.
Listen to GrenadaRoger, he worked in the field and knows about stuff like this.
Don't just cough up $$ to the IRS without sanity checking their work. I have gotten tax bills in the past from them, and some are correct (due to an error on my return), but some are incorrect (due to the IRS miscalculating or misunderstanding something). I have done my research for each one, and then called them if I disagreed. Every time I disagreed, they put me on hold for about 10 minutes, and then came back and conceded I was right, and zeroed the tax bill.
Given that this is probably a complex situation, it is best to go to an accountant and ask them if there's any way you can legally get out of all or some of these taxes.
Don't panic about the check being slow. As Roger said, the IRS is not expecting the money immediately. If the check takes more than a week, call the bank and demand they stop it, and let you come down and get a cashier's check. Your funds can't be held hostage like this.
But maybe this bank closure is a blessing in disguise. This way you didn't just pay the IRS, and now that you asked about it here, you have learned (hopefully) to get a tax accountant's opinion about how to minimize your tax payment here. Do not send the IRS a dollar until you do this.
Good luck.