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My wife sold a rental house last year and put the the

Hello, My wife sold...

Hello, My wife sold a rental house last year and put the the proceeds in the bank, about $120,000. Our tax guy is saying that we owe $69,000 in taxes. Does that sound right?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

My wife and I file married separate because we both had a house in each of our names. It seemed to work best for us at tax time. I would get money back each year and my wife would owe a couple thousand. The only difference this year is that she sold her house and put the money in the bank. I'm getting money back and she apparently needs to pay around $69,000 in taxes. that sounds insane to me. Taxes were taken out in escrow, around $17,000. She took home about $120,000 from the sale of the house. I could see maybe 30% but it is closer 60%. Could that be right?

Accountant's Assistant: Is there anything else the Accountant should be aware of?

That is all I have.

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3/27/2018
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,391
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Without having more detailed information, it would be difficult to determine if the taxes amount due is correct.

Total income comes into play when capital gains are involved. It is not just a matter of what she "took home" from the sale. If it was a rental, depreciation recapture comes into play.

Did your tax guy not explain the calculation?

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Customer reply replied 3 months ago
We are going to talk with him tonight about it. I was just looking for a second opinion. And yes, the house was a rental.

My opinion is that it is possible, but it is important for you and your wife to know why.

Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,391
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Barbara and 87 other Tax Specialists are ready to help you
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PDtax
PDtax, Owner
Category: Tax
Satisfied Customers: 1
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Customer reply replied 3 months ago
No need for the phone call, Thank you.

Phone calls are system generated. You can ignore it.

Thank you for the positive rating of my answer. It is very much appreciated.

Have a great day!

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