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If you don't fall into any of those categories, I would respond to the IRS in a polite and timely manner (always important) pointing out the requirements found in Tax Topic 701 Sale of Home (https://www.irs.gov/taxtopics/tc701.html) and note the following (if they are all true):
If you don't fall into any of those categories, I would respond to the IRS in a polite and timely manner (always important) pointing out the requirements found in Tax Topic 701 Sale of Home (https://www.irs.gov/taxtopics/tc701.html) and note the following (if they are all true):
Hi Asiago80,
I received the same thing from IRS today. What did you do with your case and what was the outcome?
Thanks and appreciate your help.
If the IRS is questioning this then a 1099-S was issued ... look in the pile of paperwork the closing company sent home with you ... that is probably where it is hiding since they usually do not mail it out in January like a W-2.
If you completed the home sale worksheet in the program then you can print it out and send it with an explanation that it was your personal residence and you did not profit more than $250K ($500K married) so you don't owe any taxes. In the program, if you knew you had a 1099-S, you just needed to click the box to have this be reported on the Sch D to avoid the IRS letter.
Thank you for the reply. In the form, IRS has 2 options:
1. I agree with all changes
I understand the IRS will send me a notice stating the proposed changes to my tax return and the amount of additional tax I owe.
2. I don't agree with some or all of the changes.
Please return this form and include a statement signed by you that explains what you don't agree with.
Which option do I go with? I think it is option 1 but will they just charge me tax even if I provide an explanation?
Either you agree in full with the IRS proposed changes which is option one or you disagree with all or some of the IRS proposed changes which is option two. Pick the one that is most appropriate for you. If it’s option one then you have the ability to make a payment right away. You don’t need to wait for another bill from The IRS because the longer you wait the more the penalties and interest will accrue. If you don’t agree then you need to respond and show what you don’t agree with by sending in supporting documents for your position. Whatever you do respond in a timely manner and be polite. Any answer you send should be short And concise.
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