Capital gains tax

[Anonymous_]

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@Hacdufall wrote:

This is probably super simple but if I have no other reportable income other than the $46k, doesn't that put it over the $40,400? 

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Yes, it puts you over the $40,400, but your standard deduction will reduce your taxable income below the $40,400 figure.

If you have other taxable income, then you need to add that to the $46,000 gain in order to determine your taxable income (on your 1040). 

You can try using TaxCaster (link below) to get an idea of the amount of your taxable income.

https://turbotax.intuit.com/tax-tools/calculators/taxcaster

[Hacdufall]

Thanks for the link. When I get to the "What were your 2021 taxable wages?" that is $0 correct? Since SSDI is my only income? If I continue with the questions it shows $0. I truly apologized since this should be simple and I can't wrap my head around it. I don't have any income over $25K.

"For most people, if Social Security Disability benefits payments represents your only income, you will not be subject to federal income taxes."

[Anonymous_]

That is correct but, for you, this year SSDI is not your only income so part of your benefits may be taxable.

[Hacdufall]

Sorry I missed some of the options when filling out that form. So with $46k as the Long Term Gain and any other deductions, property tax, and total yearly SSDI payments, which aren't over $25k, it's saying I will owe $2272. Am I missing something?

[Anonymous_]

Probably not since the gain will add to your taxable income and make part of your SSDI payments subject to tax.

[Hacdufall]

So I think I've figured most of it out but I'm going in tomorrow to a local CPA/tax advisor and run it by them.

I do greatly appreciate everyones help.

[Hacdufall]

@Anonymous_ 

I called around locally to a couple of tax advisors and wanted to make sure about the step up basis. Just to confirm, the FMV will be from when my dad passed away in 1995 correct? I was told today it was when the property was gifted to me. Any thoughts?

[Anonymous_]

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@Hacdufall wrote:

Any thoughts?

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Yes. I have no idea how you explained the facts to the tax advisors so, if you explained them adequately and to the best of your knowledge, you should accept their advice in your case.

[Hacdufall]

I think I may have it figured out or at least have my head wrapped around it. I did find some paperwork that looks like when the property was transferred to my mom after my dad passed away. The header of the paper:

Order Probating Will And Appointing Executor

Then it goes thru dates then finishes with:

It is further ordered that (mom) is hereby appointed Executrix of said estate and the court fixes bond in the sum of ($).

Whereupon the said (mom) took oath prescribed by law and entered into and acknowledged the above mentioned bond with surety having been waived.

My question is, is the amount listed the FMV? If not what is that amount representing.

[Anonymous_]

The amount of the bond has virtually nothing to do with the fair market value of the property.

The bond is simply meant to ensure performance by the executor of the estate (in the best interests of estate and the beneficiaries).

[in many instances the bond is waived in the will or by the court]

[Hacdufall]

I have a question that is probably very obvious but lets work with these numbers for now. 

Property was originally purchased for $29,500

FMV was $60k in 1994

$29,500 ÷ 2 = $14750

$60k ÷ 2 = $30k

Basis = $44,750

Home improvements total - $16k

Realtor commission - $7,500

Deed tax and fees - $500

Total = $68,750 

Which amount do I subtract the total from? $125k or after the realtor commission ($7,500) $117,500

I thought I had read that taxes are paid on he amount after realtor commission.