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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4670
Experience:  35 years tax experience, including four years at a Big 4 firm.
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I dont normally have to pay taxes because my only income is

Customer Question

I dont normally have to pay taxes because my only income is SSDI of $13032 / year. I am single and live alone. But I have a 19 year old daughter in college full time. She lives in an apartment with 3 other students. All her college expenses (tuition, fees, money for food and apartment) are paid for by her college scholaships and grants.
I sold my only home of 15 years and bought a travel trailer and truck. Im trying to figure out if the money I got from the equity in my home is taxable. I sold the house for more than I paid for it (capital gain?) and more sold it for more than I owed on it. The sale was reported to the IRS.
Im trying to figure out if I need to file taxes and if it will affect my college student daughter's Pell grants, scholarships and do I need to file taxes. Presently no one claims my daughter on taxes.
Submitted: 11 months ago.
Category: Tax
Expert:  PDtax replied 11 months ago.

Hi from just answer. I'mCustomer I'll assist.

Customer: replied 11 months ago.
Expert:  PDtax replied 11 months ago.

Even if you sold your home, you don't have a taxable gain if you lived in it for more than 2 years of the last 5. You qualify for the exclusion.

You should not have to even file a tax return unless you received a 1099-S reporting the gross proceeds of the sale.

If you received a 1099-S about your home sale, you will still be reporting $0 income on the 1040. Since your other income is taxfree, even though you might have to file, you will be reporting $0 income.

This filing will NOT affect your child's financial aid, especially since you are not claiming her as a dependent. She likely applies for financial aid as an independent person, which excludes your income from review.

Thanks for asking at Just Answer. Please take a moment to rate my assistance, as we are measured by customer feedback. I'mCustomer

Customer: replied 11 months ago.
I dont think your informationation is accurate. Certaily not about financial aid. I would appreciate my money back or talk ro someone who is more knowleable. No offense
Expert:  PDtax replied 11 months ago.

None taken. I did see something to correct.

Independent students have to be age 24 or older. My error.

Your claiming your daughter as a dependent or not has NO impact on her financial aid application.

I stand by the rest of my response, which would indicate you file a tax return with $0 on the line for capital gains on the sale of your home, and $0 for taxable social security. You only need to file if you were given a 1099-S for the sale proceeds, because IRS will want to see that you report the sale. There should not be any taxable gain, so report $0 for the gain on the sale.

If you still have issues with my response, please advise.