Do I owe capital gains if I was active military, bought & lived in the house 2007-'10, transferred to WA & CA from a house abandoned since '14 if it's out of my control

Am I still able to take the 10 year extension I was active military, bought & lived in the house from 2007-2010, then transferred to WA, then CA. I started of trying to get a short-sale in 2013, but was told to stop payments in order to be allowed to do Deed in Lieu and was approved in October 2014. Of course Wells Fargo intentionally lost my paperwork in Dec of 2014 and then kept on dragging it out and asked me to refinance 2 years later after tacking on interest/penalties/ and vacancy(nobody lived in it for 4 years because they approved the DiL and told me to get out.) I didn't get a foreclosure notice until 90 days after my retirement in Mar 2016 in order to avoid SCRA requirements. I reported WF to the Consumer Financial Protection Bureau (CFPB), but WF blatantly lied about the documentation. WF kept delaying and decided not to actually foreclose until 2018. I haven't worked since the retirement due to health reasons, but they are still trying to collect their $. Since the two years since retirement passed before they would foreclose. Am I still penalized for going over the 2 year mark and now owe capital gains from a house otherwise abandoned since 2014? To Date (NOV 2018) I still don't have a 1099c, only a 1099a.

Answer

What you have here is a LEGAL ISSUE and not a tax issue at this point. You need to get with two people at an absolute minimum, and you need to do it YESTERDAY.

First, a real estate lawyer. Based on my interpretation of your post, (no, I'm not a lawyer, CPA or tax attorney) it sounds to me like the bank defaulted on your deed in lieu agreement and the bank has a financial liability to YOU. The "lost it"? Really? You're buying that crap? I'm not.

Second, you need a tax attorney, not a CPA. I DO NOT advise you try this on your own or use TurboTax this year. Instead, you need legal representation. Again, based on my understanding of your post (which is very confusing) I honestly don't think you'll have any problem getting lawyers to represent you and it's perfectly possible that you are the one who can come out ahead on this.


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