Can I purchase a $280.000 house in cash and do I have to document and pay taxes on it. Also am I allowed to have rental income coming in from property homes. If I am only receiving disability. Do I have to file taxes on this earned income?
Hello,
Yes you can purchase a house for cash. You don't need to report the home when you buy it but you do need to keep track of the basis (cost plus improvements).
You can have it as a rental property and you would need to report the income and expenses on schedule E of your tax return and you will pay taxes on the net profit.
Based on the amount of income you disability may or may not become taxable.
Yes, you may purchase a home with cash while you are receiving social security benefits. Your social security benefits will not be affected by purchasing a home.
You should keep records for your own financial records, and for future tax implications, if the house ends up being sold. Purchasing a home does not trigger immediate tax responsibilities, but you do need to keep in mind that there will be property taxes that need to be paid each year that are assessed based on the value of the property.
Regarding the rental income, yes, you must report all rental income and expenses on your tax return. Rental income is typically taxed as ordinary income and reported on schedule E of your personal 1040. You can deduct rental expenses such as mortgage interest, property taxes, maintenance, etc.
Here is an article regarding how to report rental income & expenses in TurboTax:
TurboTax Where do I enter income and expenses from a rental property?
You can purchase a new home paying with cash. If you do purchase a home, you'll want to keep your settlement/closing statement in a safe place as this document will help you to figure your cost basis (how much you paid) for your home. When the time comes that you sell your home it's then that you may have to pay capital gains on the sale. If you meet the IRS criteria for excluding certain amounts of capital gain on the sale of your home, it can potentially save you from paying a lot of tax on the sale of your home. Please see the following link for more information: https://www.irs.gov/taxtopics/tc701
Yes, you can earn vacation rental income while receiving social security benefits. It is generally not considered earned income, and generally does not affect your social security benefits.
However, if you are involved actively in managing the vacation rental or providing various guest services, the social security administration may treat it differently.
Do you help who are social security, have they had any history with you that it work