Take the case to the Supreme Court for any other accounting being an illegal government taking.
The Alternative Minimum Tax was ostensibly only intended to cover "the rich," but inflation has fixed that.
A few years of Ubama's upcoming double- or triple-digit inflation, and you won't be able to sell a backyard tool shed without paying capital gains.
I thought at one time,maybe it is in the past now, you had a one time exemption on the sale of the primary residence.dont know if there was a monetary limit..good luck....
Capil Gains is now 20% plus 3.8% 0bamacare tax for those making over $250k per year.
Under $250k it is 15% and no 0bamacare taxes.
It is $250K for an individual, $500K for husband and wife. If your mom has passed there may be some way to carry over her exemption. Check with your tax people.
“Capil Gains is now 20% plus 3.8% 0bamacare tax for those making over $250k per year.
Under $250k it is 15% and no 0bamacare taxes.”
But if your Dad lived in the house for more than 5 years, I believe he is exempt for the first $500k of profit on the sale of his house.
Partly, it depends on the state.
Partly, it depends on the status at the nursing home.
Check with Nursing Home business staff. They can tell you more about such sales.
been there done that and your getting into areas and time frames where an estate attny and or tax person can save you from $$$ mistakes.Find one or both and don’t depend on “opinions” from a web site.
Don’t think of selling it for less than fair market value, or it will be considered a divestment for medical assistance, should that be needed.
It probably would be best to contact an attorney who specializes in elder law to explore all options and come up with the least detrimental one...
You can be assured that no matter what plan of action you take, they’ll get you on the other side of the issue. They have all of their bases covered.
Rent it out, with or without to-own option.
Don’t think of selling it for less than fair market value, or it will be considered a divestment for medical assistance, should that be needed.
It probably would be best to contact an attorney who specializes in elder law to explore all options and come up with the least detrimental one...
You can be assured that no matter what plan of action you take, they’ll get you on the other side of the issue. They have all of their bases covered.
Your dad gets a tax waiver due to the fact that he is selling his primary residence. I assume he lived there for 2 years or more before going into the nursing home. The waiver is on $250,000 of “profit” so that would be over and above what he paid for it. If he paid $100,000 then he could sell for $350,000. Or if he has a mortgage obviously that has to be deducted.
Talk to a tax preparer.
I believe the cap gain tax has increased but not on real estate.
Your father had five years to sell after move out and he gets $250,000 exemption. If mom lived there he mastill get her $250,000.
Note states may have a separate cap gain tax on top of the Feds.
Talk to your dad about a trust if he doesn’t have to sell. Trustee can sell house at value at time of death with no cap gain tax.
Cash out refi would make sense if you want to avoid capital gains.
There are many possible tactics. I suggest you consult wit a tax attorney.
The main thing is, after taking out the $250K, how much is the gain? If it is under $200K, then the capital gains tax rate would be 15%. If you have medical expenses, then there would be itemized deductions. You also have to look at the basis of the house, and see if you can find any qualifying improvements that would reduce the gain. Is the house entirely unchanged from 1963?
You’re looking for Schedule D Capital Gains—Instructions
http://www.irs.gov/pub/irs-pdf/i1040sd.pdf
It’s online—they have the 2011 instructions. Very important information due to your mom’s passing—the $ 500,000 threshold is not out of the question depending on meeting certain tests—see page D-2 right hand side.
A good accountant can steer you straight. Do not take advice from the nursing home staff under any circumstances.
There are a lot of Financial Advisors out there and I've been down that path and basically got scammed.....USE A CPA
Two possibilities, first try to look into reverse mortgages, to find a reputable company. This can work in several ways, as a lump sum payment, or as a monthly payment that just offsets his expenses, which is probably better. This *may* also offset much of the capital gains taxes as well.
You do need financial-legal advice to see if it would be better to set up a family trust, with the house being the major asset in it, along with cars and other assets, which avoids inheritance taxes as well.
Importantly, you also need to do all this while he is of sound mind, when he can also assign you power of attorney that sits idle until he is incapacitated. If he has a safe deposit box, it also should have other authorized signers for it, so it will not be sealed immediately when he dies.
Find a really good CPA — pay them what they’re worth - probably upwards of over $500 an hour... worth every penny. Try to find one that specializes in issues dealing with the elderly - there might be other things you need to know... might as well use up the whole hour.
Find a really good CPA — pay them what they’re worth - probably upwards of over $500 an hour... worth every penny. Try to find one that specializes in issues dealing with the elderly - there might be other things you need to know... might as well use up the whole hour.
Also lawyers who deal with the elderly charge less and often have great advice. My very limited experience is that the very best are often cheaper in the long run. They’re not doing on the job training and they know their stuff so well you won’t be charged for ‘research’... You’re in my prayers.