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Thread: Ohhh J.J I need help!!!

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    #1

    Ohhh J.J I need help!!!

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    ok, so Dh will be getting 30,000 from the sale of his fathers home.

    * this will be reported to the IRS on a 1099 as misc income-

    * this will put us well over 6 figures for income for the 2012 tax season.

    * I own my own business and file quarterly based on that income alone and then file married filing joint at the end of the year.

    * we MAX TSP and have a money market, a savings and a ROTH IRA ( that does not get maxed until the end of the year tho we pay into it monthly)

    * we do not need access to the money at all ( we are debt free except for our home)

    * we claim 0 and have no children at home

    I know we cannot 'shelter' the money really and what i want to know is what would be the best way to keep from getting slammed at tax time?
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    Well, can you give me some more details (you can PM if you want). Why was home sold? If it was part of settling your father-in-law's estate, was the house owned solely by your father-in-law? If that's the case then the value of the house, for capital gains tax purposes, would be the date of death value. This could mean very little tax impact for you guys.
    J.J. Montanaro is a CERTIFIED FINANCIAL PLANNER practicioner with USAA Financial Planning Services one of the USAA family of companies.
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    JJ, yes it was sold because FIL passed away-

    the tax appraisal was 54,000 with FL homestead, it sold for 75,000 cash ( we got really lucky), current market value was a little over that.

    it was soley owned and paid for in full before his death.
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    So it sounds like the $30K was your husband's share? The house is a capital asset and would have received a step-up in cost basis when your father-in-law passed away, so the basis would be the date of death value. Did the house increase in value between the time he passed and when it was sold? The answer to that question will determine the tax impact...so, my guess is that you would have little or no gain/tax impact. Of course, you should seek the help of a qualified tax advisor. IRS Publication 559 details the basis of inherited property. Does that make sense?
    J.J. Montanaro is a CERTIFIED FINANCIAL PLANNER practicioner with USAA Financial Planning Services one of the USAA family of companies.
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    yes, it was split evenly minus costs between him and his sister. FIL died in jan and he closed on april 9th, I do not believe it went up in value-between that time- ( his home was near Ft Myers where the property values have dropped over 65-75% in the last 5 years.)

    you have relieved my mind, I was really afraid that we would be hit with an income tax bill for 100,000 dollars worth of combined income !!!
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    Glad to provide some relief on the tax front just before tax day
    J.J. Montanaro is a CERTIFIED FINANCIAL PLANNER practicioner with USAA Financial Planning Services one of the USAA family of companies.

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