About Karen Brawner Expertise I will help you with your questions regarding personal taxes and sole-proprietorships. I prefer not to answer questions regarding Coporations, Partnerships and LLC`s... Been in accounting and tax preparation field for 38 years, in business for myself in the same fields for 10 years prior to retirement due to disability.
Experience Been in the field of bookkeeping, accounting and tax preparation for 38 years. Had my own bookkeeping and accounting firm for 10 years and then turned it over to my daughter when I became disabled.
Question I just sold a house I have not lived in for over six years (not rental). There was a tax lien on it for back taxes (penalties and interest added). The IRS took there share at closing, $12,000. I was left with a check for $14,000 after mortgage pay-off, realtor charges. Do I have to claim $26,000 as capital gaines or can I deduct the $12,000 IRS took, somewhere?
Answer Dear Maurice, First of all it may be more than $26,000.00 since the capital gain and schedule-D are figured on the COST basis of the house subtracted from the SALES price.... This means that if the COST basis and the SALE price are MORE than $26,000.00, you will owe capital gains tax on that and you will owe income tax on the GAIN as well....
Since you did not provide me with EXACT selling price (including the $12k, the mortgage and realtor charges and the $14k etc) and since you did not provide me with the appraised or FMV or cost basis, I can not specifically answer your question, but I can tell you that you will OWE capital gains and income tax on EVERYTHING that is the difference between the COST and SALE price....
