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We were living in a home in which we had lived years and had

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We were living in a...
We were living in a home in which we had lived for 36 years and had no mortgage balance, only a small equity line of credit with our bank. Two years ago we decided to buy & finance a new home to be our residence. We chose to rent out the previous residence in order to make the mortgage payments on the new home. Renting didn't work out well. We have now decided to sell that house outright and pay off both the new mortgage and the equity line of credit, which we have been using to make improvements to the new house. We have made considerable improvements to the new house. Since we used the rental payments to make the mortgage payments on the new house, are they still taxable as rent, and is there some way to make the whole deal, even though it spans 2+ years come out as selling one home and replacing it with another. We are married filing jointly, and I understand there are no capital gains tax under $500,000 profit? We live in Alabama, and are ages 66 and 62 now, main wage earner retired in 2009, well before all this occurred.
Submitted: 1 year ago.Category: Tax
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5/31/2016
Tax Professional: Jason M. Tyra, CPA, Certified Public Accountant (CPA) replied 1 year ago
Jason M. Tyra, CPA
Jason M. Tyra, CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 178
Experience: Principal at Jason M. Tyra, CPA, PLLC
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Hi Tricia:

Thanks for getting in touch. I will be glad to answer your question.

For the first part, rental income is taxable as such, regardless of how the proceeds are applied. However, you can take the expenses associated with the rental property, including any allowable deprecation, taxes, etc. against rents received during the year. You should report the income and expense on Schedule E with your return.

If you meet the primary residence exclusion criteria, you should be able to omit up to $500k (for a married couple filing jointly) in capital gain on the sale of your rental house from your income in the year of the sale. In order to qualify for the exclusion, you must have occupied the house for at least two of the last five years. It sounds like you did, so you should be ok on the sale, as long as it happens soon.

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Customer reply replied 1 year ago
Your most recent letter to me says:
"Hi Tricia, I hope my answer to your Tax question on JustAnswer was helpful. Until rated, I don't receive any compensation for answering your question."
I am disputing my contact with JustAnswer and requesting a refund. To put it bluntly, no, your answer was not helpful. I did not choose a CPA, I did not want a CPA, I did not agree to a CPA. I am a bookkeeper with 40 years experience. You told me nothing I didn't already know. I am sorry that you got caught in the misleading and fraudulent dealings that I experienced with JustAnswer, and I don't know if you can be compensated if I am issued a refund. My guess is you can take it up with them. I am totally disillusioned with JustAnswer and felt it to be nothing more than a deceitful come-on for money received under false pretenses.
Tax Professional: Jason M. Tyra, CPA, Certified Public Accountant (CPA) replied 1 year ago
Congratulations on your many years of experience. I would have expected someone in your position to know the answers to the questions you asked, but that's neither here nor there. This works best when the initial answer triggers a dialogue, especially if you didn't get the information you wanted. I'm not sure why you instantly decided you were misled, but if you want to reach out to me directly I can try to help you with your issue.I don't work for JustAnswer and have no ability to resolve problems or issue refunds. While the note you received concerning ratings and compensation is true, it was an automatically generated poke. Please contact JustAnswer's support team using the link on the website.
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Customer reply replied 1 year ago
This is the response I got from JustAnswer's support, and my reply to them, just so you will know what my complaint's are. My complaints are not really about your answer, but about the shoddy way that the JustAnswer website came across to me. As you read this, the YOU in my text is JustAnswer, not Jason Tyra, just so you know. And again, my issue is with JustAnswer, not with you, Jason Tyra.
**************
None of what is stated below is as it was stated in the info screens that were presented to me. I was offered a specific PERSON to answer my question, and the price put forth was for this PERSON. That is what I agreed to. The good faith deposit was listed as FIVE dollars, not the full $46. The page showed deposit FIVE dollars, balance due upon receipt of answer $41. Only AFTER PayPal was pulled up, did the charge become the full $46. I should have known then not to pay it; that this was just another ripoff.I did not set the $46 price, YOU did. The person that came up was a NY Tax Attorney with a PHD, and the price for HIM was listed as $46. This is what I agreed to. This is NOT what I got.At no time was I offered a choice of persons to answer my question; at no time was I told that my question would be answered by a CPA. I would not have agreed if I was. I am as experienced as most run-of-the-mill-CPAs! The answer I received from the CPA YOU chose told me absolutely nothing I did not already know. I have not rated his answer, as I hate to rate him badly, since I feel like his failure to answer my question is not necessarily his fault. I would have known from the beginning that he couldn’t answer my question, and would not have chosen him, and certainly would not have agreed to pay him $46!I am appalled at the falsity of the information I was given, the lies included in your answer below, and the fraudulent practices that led me to agree to ANYTHING you offered on your site. I have already complained through PayPal, and will not hesitate to follow through with them.Lies:
a customer sets the dollar amount that they are willing to pay
a good faith deposit for the full amount that they are willing to payI want a complete refund NOW. If my refund has not been processed by the end of the week, I will escalate my dispute for resolution with PayPal.Tricia Johnston
Accounting
Huntsville, ALFrom: JustAnswer Customer Support [mailto***@******.***]
Sent: Wednesday, June 01, 2016 3:52 AM
To:***@******.***
Subject: [#LNS-225-77522]: JustAnswer Customer CareHello,Thank you for contacting JustAnswer and I apologize for any confusion.When asking a question on JustAnswer, a customer sets the dollar amount that they are willing to pay for a satisfactory answer to their question. Either before the question is posted, or before the Expert's response to a question is revealed, the customer must make a good faith deposit for the full amount that they are willing to pay for the satisfactory answer to their question. The deposit is fully refundable if the customer is not satisfied with any of the answers that they receive to their question. The charge that was made to your account was for the good faith deposit.The Expert who answers a customer’s question is paid only after the customer gives their answer a positive rating. The Expert is paid using the customer’s good faith deposit, so an additional charge is not made to the customer unless the customer decides to leave a bonus for their Expert that exceeds the value of the credit already on the customer’s JustAnswer account.An overview of this process can be found on the How It Works page:http://ww2.justanswer.com/how-justanswer-worksThe reason behind the good faith deposit is to assure both Experts and customers that the transaction will be successful. The customer knows that if the answer is unsatisfactory, then their deposit will be refunded as part of our 100% satisfaction guarantee. The Expert, in turn, knows that the funds to pay for their answer have been authorized and will be available once the customer rates the answer as satisfactory.If you have any additional questions, please reply to this email and I will be happy to assist you.Regards,Ervin R.
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Jason M. Tyra, CPA
Jason M. Tyra, CPA, Certified Public Accountant (CPA)
Category: Tax
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