Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

We bought a house in 4/29/2013. We cashed out my husbands

Customer Question
We bought a house in...
We bought a house in 4/29/2013. We cashed out my husbands retirement to meet the 20% down payment, which was taxed about 15,000. My husband was transfered to Casa Grande az in May of 2014, We couldn't sell it so, we rented it to someone with the intention to buy in July of 2014. They moved out, in May 2015. We rented it again to someone with the intention to buy July 30, 2015 and closed In August 24, 2015.
We sold it for just over 18,000. More than the loan. So basically got his retirement back and an extra 3000. So my question is do I seriously have to pay 5,600 tax on 18,000? that is almost a third!!!
Submitted: 1 year ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 8 minutes by:
4/9/2016
Tax Professional: Lev, Tax Advisor replied 1 year ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,141
Experience: Taxes, Immigration, Labor Relations
Verified
Based on your information - the property was converted to rental.I am not clear how you calculated teh gain.Generally - you will need to use an adjustment basis - take your purchase price and purchase expenses PLUS improvement expenses MINUS depreciation for teh time teh property was rented = that is your adjusted basis.The gain = (selling price) MINUS (adjusted basis) MINUS (selling expenses)The gain is taxable income - however because teh property was owned more than a year - it is a long term capital gain - taxed at reduced rates - for most people not more than 15% - but mainly that depends on your other taxable income.State taxes are extra.Assuming you correctly calculated teh gain - I am still not clear how you determined the tax liability...
Ask Your Own Tax Question
Customer reply replied 1 year ago
turbo tax calculated it, but didn't ask me any of those questions, I guess I should have someone do my taxes for me this year?
We keep track of our expenses for our "farm" ---my husband trains rope horses, and ropes on them, winning money--- on a calendar, basically we just write down all of the miles he travels, the money we spend on hay, the stall fees, and any money he wins at ropings, and money he loses. there are no "official receipts" is that bad if we get audited?
Customer reply replied 1 year ago
So is the house considered an investment because I had to rent it? I have another house in New mexico that I bought before the one I just sold . We had to rent it as well, same story couldn't sell it for what we owed, we bought when the market what was high, and then it tanked. So which one is considered my second home? Since the one I lived in last just sold and the one I lived in first I still have as a rental. I didn't buy another house because I didn't want to get stuck again. So I am renting...
Tax Professional: Lev, Tax Advisor replied 1 year ago
I would be glad to verify your tax reporting - but would need to see tax forms.Generally - I would expect 15% tax on long term capital gain plus 5.6% Arizona tax - total ~20%.It is possible that your tax liability is higher but we would need to verify all circumstances..Regarding supporting documents - you are required to keep adequate records.If the auditor would find your records not adequate - the risk is that deduction would be disallowed - and as result - you may have additional tax liability.
Ask Your Own Tax Question
Customer reply replied 1 year ago
I don't know what a tax auditor would consider adequate records, is there some kind of guidelines? I don't like phone calls, I don't remember what was said very well. This way I know exactly what I asked, and what you answered.
Tax Professional: Lev, Tax Advisor replied 1 year ago
Section 1.274-5T(c)(2)(i) provides that, to substantiate each element by adequate records, the taxpayer must maintain: 1) an account book, diary, log, statement of expense, trip sheets, or similar record; and 2) documentary evidence that, in combination, are sufficient to establish each element of an expenditure. The account book, diary, log, statement of expense, trip sheet, or similar record must be prepared or maintained in such manner that each recording of an element of an expenditure is “made at or near the time of the expenditure.” § 1.274- 5T(c)(2)(ii). The phrase “made at or near the time of the expenditure” means the elements of an expenditure are recorded at a time when, in relation to making the expenditure, the taxpayer has full present knowledge of each element of the expenditure, such as the amount, time, place, and business purpose.
Ask Your Own Tax Question
Tax Professional: Lev, Tax Advisor replied 1 year ago
For your reference - you might want to see IRS publication 463 page 25https://www.irs.gov/pub/irs-pdf/p463.pdfWhat Are Adequate Records?You should keep the proof you need in an account book, diary, log, statement of expense, trip sheets, or similar record. You should also keep documentary evidence that, together with your record, will support each element of an expense.Documentary evidence. You generally must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses.Adequate evidence. Documentary evidence ordinarily will be considered adequate if it shows the amount, date, place, and essential character of the expense.For example, a hotel receipt is enough to support expenses for business travel if it has all of the following information.The name and location of the hotel.The dates you stayed there.Separate amounts for charges such as lodging, meals, and telephone calls.A restaurant receipt is enough to prove an expense for a business meal if it has all of the following information.The name and location of the restaurant.The number of people served.The date and amount of the expense.If a charge is made for items other than food and beverages, the receipt must show that this is the case.Canceled check. A canceled check, together with a bill from the payee, ordinarily establishes the cost. However, a canceled check by itself does not prove a business expense without other evidence to show that it was for a business purpose..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 with all tax related issues.
Ask Your Own Tax Question
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,141
30,141 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
What are the taxes rates 2016 for term gains in irrevocable
what are the taxes rates 2016 for long term gains in irrevocable trusts … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
Suppose my taxable income in 220,000 this year and the tax
Suppose my taxable income in 220,000 this year and the tax rate is X up to 200K, but Y for 200and over, do I pay Y on the full 220K or just that above 200K? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Can I report rental income in my tax return on a property
Can I report rental income in my tax return on a property thar is owned by my father? He does not live in the US is not a US citizen and can sign a document to allow me to receive the rental… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
How to report cancellation of debt on rental property?
I received a 1099-C for my rental property that I held for over 1 year. According to the worksheet provided in IRS Publication 4681 I was insolvent just prior to the debt being canceled. My question i… read more
Dr Arthur Rubin
Dr Arthur Rubin
Doctoral Degree
24 satisfied customers
My question is about depreciation for rental property. My
Hello. My question is about depreciation for rental property. My rental property had no income during one year. In this case, since there was no income, I do not need to claim depreciation for that sa… read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
31 satisfied customers
Dose mean can not deduct state income taxes only or dose it
dose mean can not deduct state income taxes only or dose it includes property taxes too … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Figure out how much is my tax liability + my capital gains +
Figure out how much is my tax liability + my capital gains + depreciation recapture tax … read more
Lev
Lev
Tax Advisor
30,141 satisfied customers
Im semi retired ,sold a rental property Ive had for 3 yrs &
Second opinion] Im semi retired ,sold a rental property Ive had for 3 yrs & have a capital gain about 60K . Im single no dependants & will have about 30 k in 1099 income this year. Will I owe 15% tax … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
Form 1120, cash basis. If Taxes paid to IRS are deductible,
Form 1120, cash basis. If Taxes paid to IRS are deductible, are refunds for overpayment the equivalent of income?… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
Want to see on irs website the correct way to report
want to see on irs website the correct way to report personal items i sold that show on my 1099k … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
I am retired and own property in 2 states. Is it legal for
I am retired and own property in 2 states. Is it legal for me to live in Indiana for 8 months a year without having to pay Indiana's state income tax while I live in Florida for 4 months a year. I cur… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Sell of property tax liability. Ca. Bought home 25 yrs ago
bought home 400,000 selling 2.5 mil. Invested 500,000 owe 800,000… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,310 satisfied customers
What would the federal and state tax rate percentages be for
What would the federal and state tax rate percentages be for a $7700 IRA early withdrawal in Ohio?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,466 satisfied customers
Can house maintenance and property taxes be deducted on form
Hello. Can house maintenance and property taxes be deducted on form 1041 for a house owned by decedent prior to the Executors selling it? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I didn't claim depreciation on a rental property for 8
I didn't claim depreciation on a rental property for 8 years. I'm about to sell the property. How many years of the past annual depreciation can I claim? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
ON A 1041 FORM IS THE TAX FIGURED ON ADJUSTED TOTAL INCOME
STEPHANIE, ON A 1041 FORM IS THE TAX FIGURED ON ADJUSTED TOTAL INCOME MINUS THE 4050 EXEMPTION? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I filed my taxes with Turbo Tax and submitted the forms with
I filed my taxes with Turbo Tax and submitted the forms with E-File on April 11. A few days later I received an e-mail saying that my file was rejected due to a Turbo Tax problem, so following instruc… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
If you do not work, retired, and receive no taxable income,
If you do not work, retired, and receive no taxable income, do you have to file a tax form… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x