Have a Tax Question? Ask a Tax Expert
The notice has a a time limit to reply.You need to reply before the due date.
Do not ignore the notice - it might be more difficult to deal with your tax debt after the final assessment.
If looks as the taxing authorities treated the full proceeds as your gain.You do need to file your tax return and calculate the gain as (selling price) MINUS (adjusted basis)If you have a gain and do not qualify for exclusion - that gain would be taxable.If that was your primary residence - you may claim an exclusion - and the best way woudl be to file the tax return with all these information.
I would reply by fax AND mail the same information again via certified mail to retain the receipt.
Mention in the reply that you previously replied by the fax - and provide a copy of the receipt.If that was your primary residence - you might be eligible to exclude a gain - up to $250k for a single person.
If you were issued form 1099S - you would be required to file the tax return and claim the exclusion.
If you only received form 1099A - no need to file.
If you received from 1099C - reporting cancelled debt - that is a different issue - and that amount taxable - but you might be eligible to exclude by filing form 982 with your federal tax return. If you did not do that - you would need to amend your federal tax return - and provide a copy to state taxing authorities.As you already received a final notice - please do not delay.
I am glad to be helpful.
I appreciate if you take a moment to rate the answer.
Experts are ONLY credited when answers are rated positively.
If you still have any doubts, need clarification - please be sure to ask.I am here to help you will all tax related issues.