I've got a really difficult situation here with home sold

So because my Home sold Under 2 years I owe Capital Gains Taxes now, and just not what know about never owed before so

Now im not actually able to even pay Capital Gains Taxes because my own Bank Account is apparently Closed, which seems all wrong here. From the out of the ordinary large one transaction was told. And now 'm left with nothing no money, no bank account, a very large Capital Gains Tax bill. And at end of day, unsure what im supposed to do here now. In the end ill pay my Capital Gains plan too, will see an accountant but im posting here since some here ive come to learn are Professionals and maybe understand all this. One thing im not and never wanted to think i was is a Lawyer or Accountant so this is beyond me. And ill pay one eventually but atm any advice helps. If you don't pay Capital Gains Taxes that's a problem with the IRS then correct and they'll then garnish all you're wages until its recovered or no (NOT planning on not paying just curious) and worried atm.

Thanks for any advice and input here

How about go to another bank and open a new account, deposit profit from house sale, pay tax on house gains. Next time live in the house you purchase more than two years to avoid the immediate tax bill.

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Originally Posted by DukeCaboom

How about go to another bank and open a new account, deposit profit from house sale, pay tax on house gains. Next time live in the house you purchase more than two years to avoid the immediate tax bill.

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Well yeah of course except at the moment im told my check is in the mail and in 2023 (???) wtf is that

That seems all wrong to me here or im letting my own paranoia and emotions control my head and idk here. Could have gotten a wire to my new bank if id of been forewarned or they wanted this to be easily figured out by me. So yeah absolutely except my bank decided to snail mail me a check and in 2023 just feels absolute wrong so that's why i haven't cant yet. When all said and done hopefully everything will be all peachy and good, im going to have a real issue with this bank, now for doing this was pathetic and horrible timing, is why.

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Originally Posted by garrett

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Originally Posted by DukeCaboom

How about go to another bank and open a new account, deposit profit from house sale, pay tax on house gains. Next time live in the house you purchase more than two years to avoid the immediate tax bill.

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Well yeah of course except at the moment im told my check is in the mail and in 2023 (???) wtf is that

That seems all wrong to me here or im letting my own paranoia and emotions control my head and idk here. Could have gotten a wire to my new bank if id of been forewarned or they wanted this to be easily figured out by me. So yeah absolutely except my bank decided to snail mail me a check and in 2023 just feels absolute wrong so that's why i haven't cant yet. When all said and done hopefully everything will be all peachy and good, im going to have a real issue with this bank, now for doing this was pathetic and horrible timing, is why.

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Call that lawyer. It's not happening for me, a Commie Canuck, but money is king in the good old USA

BTW, I do have a lawyer by the name of Bert King...Nanaimo
He has me blocked

Did you not have a lawyer representing you when you sold the house? I’m sure they could help direct you.

Bishops needed to be activated the moment mom and dad made their move against you. Here's the play now:

-Get hard with the bank. Follow up on the status of the check or make other arrangements. (Probably best to have a trusted person aid you with this)

-Communicate with your parents about the bind they put you in and demand restitution. Gently remind dad there's a number of ways to proceed.

Getting cucked by your parents is awful but there is ways to recover. NO MORE MR NICE GUY.

Hope it works out.

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Originally Posted by Sloppy Joe

Bishops needed to be activated the moment mom and dad made their move against you. Here's the play now:

-Get hard with the bank. Follow up on the status of the check or make other arrangements. (Probably best to have a trusted person aid you with this)

-Communicate with your parents about the bind they put you in and demand restitution. Gently remind dad there's a number of ways to proceed.

Getting cucked by your parents is awful but there is ways to recover. NO MORE MR NICE GUY.

Hope it works out.

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Don't understand we agreed at closing no lawyers with the title company to the amount of money each side got. And that worked out fine. Did not have a lawyer. Didn't need one didmt think. And then 2 Days Later my Bank closed my account out of nowhere all my money gone.like that's the crusher here and bc out of ordinary trans or something but not what I did on purpose

Today my mom and dad moved into their new house they bought without me with the money from our home we own together. I don't have an address so it's a little hard if someone can private message me Id appreciate it with some advice.

Public forum can't say too much more but it took two years and this was done very strategically and I'm just hurt and broke now go figure. Didn't even waste my own money I'm so confused honestly how I got here when thought was doing things right here but was set up and got got. Just scummy

todd can we get garrett's parents on an emergency radio show pls?

Def sounds like a rags to riches to rags story real quick.

With family like that, who needs enemies?

I'll say a prayer for you, brother.

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.

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Originally Posted by garrett

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Originally Posted by Sloppy Joe

Bishops needed to be activated the moment mom and dad made their move against you. Here's the play now:

-Get hard with the bank. Follow up on the status of the check or make other arrangements. (Probably best to have a trusted person aid you with this)

-Communicate with your parents about the bind they put you in and demand restitution. Gently remind dad there's a number of ways to proceed.

Getting cucked by your parents is awful but there is ways to recover. NO MORE MR NICE GUY.

Hope it works out.

---

Don't understand we agreed at closing no lawyers with the title company to the amount of money each side got. And that worked out fine. Did not have a lawyer. Didn't need one didmt think. And then 2 Days Later my Bank closed my account out of nowhere all my money gone.like that's the crusher here and bc out of ordinary trans or something but not what I did on purpose

Today my mom and dad moved into their new house they bought without me with the money from our home we own together. I don't have an address so it's a little hard if someone can private message me Id appreciate it with some advice.

Public forum can't say too much more but it took two years and this was done very strategically and I'm just hurt and broke now go figure. Didn't even waste my own money I'm so confused honestly how I got here when thought was doing things right here but was set up and got got. Just scummy

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how did you acquire your interest in the property? (was it gifted to you by your parents?) (also, did you have a judgement or levy unrelated to the home sale, thus the bank seized you cash from the sale? if so you really need an attorney)

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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.

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:this

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.

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Originally Posted by garrett

So because my Home sold Under 2 years I owe Capital Gains Taxes now, and just not what know about never owed before so

Now im not actually able to even pay Capital Gains Taxes because my own Bank Account is apparently Closed, which seems all wrong here. From the out of the ordinary large one transaction was told.

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well, personal income tax accounting is usually cash based (not accrual), so if you did not receive the cash from the sale you haven't an event that results in taxable income (no sale recognized yet), thus no tax owed...however, if the cash was taken from you per bank levy or some collection effort then used to pay an outstanding debt of yours, you are considered to have received the cash--then you've got taxable income.

Do you know why your account was closed? Was it because of suspicious activity? that's unreasonable--you can explain the deposit is not from illegal activity but from a real estate sale.

And am i correct in assuming the escrow company will pay you by check rather than by wire transfer into your bank account? Or have your proceeds been seized?

Rhetorical question

Did Garrett have a real estate attorney?

Nobody ever does. I’m willing to wager this was brought up (by me) in his previous house thread(s).

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Originally Posted by Dan Druff

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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.

---

:this

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.

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Congrats Dan the Man on 50k posts ! Most of them top quality, outside of the vax posts. Here's to another 50k !

^^ I'm near certain you will hit 100k here, before 10k at VCT :)

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Originally Posted by GrenadaRoger

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Originally Posted by garrett

Don't understand we agreed at closing no lawyers with the title company to the amount of money each side got. And that worked out fine. Did not have a lawyer. Didn't need one didmt think. And then 2 Days Later my Bank closed my account out of nowhere all my money gone.like that's the crusher here and bc out of ordinary trans or something but not what I did on purpose

Today my mom and dad moved into their new house they bought without me with the money from our home we own together. I don't have an address so it's a little hard if someone can private message me Id appreciate it with some advice.

Public forum can't say too much more but it took two years and this was done very strategically and I'm just hurt and broke now go figure. Didn't even waste my own money I'm so confused honestly how I got here when thought was doing things right here but was set up and got got. Just scummy

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how did you acquire your interest in the property? (was it gifted to you by your parents?) (also, did you have a judgement or levy unrelated to the home sale, thus the bank seized you cash from the sale? if so you really need an attorney)

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2020 was hit by a car walking home and got a 110k lawsuit settlement that's how I was able too. We used my money as the down-payment. So ill stop there and for legal reasons, this is a public forum and some of this for me hurts and is just complicated honestly. And with that money was able to buy a home with my mother, her job got the Mortgage my lawsuit money we used as a down-payment. And that's why im owner, but ill stop there but with investments and family its Complicated and not always right..

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Originally Posted by garrett

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Originally Posted by GrenadaRoger

how did you acquire your interest in the property? (was it gifted to you by your parents?) (also, did you have a judgement or levy unrelated to the home sale, thus the bank seized you cash from the sale? if so you really need an attorney)

---

2020 was hit by a car walking home and got a 110k lawsuit settlement that's how I was able too. We used my money as the down-payment. So ill stop there and for legal reasons, this is a public forum and some of this for me hurts and is just complicated honestly. And with that money was able to buy a home with my mother, her job got the Mortgage my lawsuit money we used as a down-payment. And that's why im owner, but ill stop there but with investments and family its Complicated and not always right..

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good, so you do have an investment in the property---that investment will offset the gross proceeds you received (net down your gain) and as long as you were on title (named as an owner/seller in the escrow document) you should be okay with both the ownership & residence test...and look at the special circumstances to see if the 2 year rule is waived---because of a family member's health (mom or dad) those circumstances may apply. From what you've told it sounds like you may get partial gain exemption--but do talk (in depth) with an expert you trust.

One thing more, if indeed you sold the property in January 2023 you have until next year's filing deadline (April 15, 2024) to report the gain without getting an extension, but you will need to pay tax estimated by the 1st Qtr 2023 deadline (April 15, 2023) to avoid interest and late payment penalty.