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I sold my house and got about 12,000 in profit. This is a…

I sold my house...

I sold my house and got about 12,000 in profit. This is a House i was living at, no rental property. I am receiving Social Security Benefits SSDI). Will they consider this an earned income (gain full activity)? Will they take away my SSDI? I am already making about $6,000 a year in earned income.

Accountant's Assistant: What state are you in? It matters because laws vary by location.

In overseas righ now. But my house was in Iowa. I’m an Iowa resident.

Accountant's Assistant: What steps have you taken so far?

Nothing. I consulted an attorney last year, but he didn’t know the answer. I sold my house last year. I still have to do the income tax. I think an experienced Social Security Lawyer can answer this question.

Accountant's Assistant: Anything else you want the lawyer to know before I connect you?

Not sure. How much he will charge for answer? Or she?

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Answered in 3 hours by:
3/23/2018
Kelly McGlynn
Kelly McGlynn, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 31
Experience: President at Exceptional Bookkeeping Inc.
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Hello. Thank you for your question. I'm Kelly and am here to help you today. I am reviewing your question and will be with you shortly.

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If the sale was your primary residence and you lived there for at least 2 of the last 5 years, the gain on the sale in excluded from income up to $250,000 for single taxpayers.

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Customer reply replied 3 months ago
Thanks for answering. My question was if I am going to lose my Social Security Disability benefits or SSDI (not SSI which is Supplemental Income). Sorry about it.

I see. I am not an expert on social security benefits so I will opt out and allow another expert to assist you with this question. Have a good day.

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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,132
Experience: Taxes, Immigration, Labor Relations
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If you are getting social security disability benefit s- which are based on working record - these benefits will NOT be affected.

The gain realized on the sale is NOT earned income - so that will not affect the amount neither the amount of your benefits nor your disability determination.

Moreover - if that was your personal dwelling - you woudl not be taxable in that gain either.

Let me know if you need any clarification this matter.

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Customer reply replied 3 months ago
Lev, nice to hear that! Thanks for your answer.Also, part of the House was used for business (home business), but only 17%. If so, will a proportion of that “profit” (about $12,000 total) will be considered earned income?This is probably a second question, so it will be OK is you want to charge a little bit more.

You may realize some taxable gain when the property was used for business purposes - that is correct.

However while that gain will be taxable - that is still NOT earned income - and will not affect the amount of your social security benefits.

Earned income is income from wages or self-employment income.

As you likely owned the property more than a year - it will be long term capital gain - taxed at reduced rates.

Some gain may be taxed at zero percent - and some at 15% - depending on your total income.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,132
Experience: Taxes, Immigration, Labor Relations
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Lev and 87 other Tax Specialists are ready to help you
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Customer reply replied 3 months ago
THANK YOU LEV! I appreciate your answer. Gonna sleep better tonight :)
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