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SVTPerformance's Chain of Restaurants
Road Side Pub
Thoughts on Real Estate- bubble burst or not?
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<blockquote data-quote="sleek98" data-source="post: 16708752" data-attributes="member: 144145"><p>You tell the IRS what you sold it for and what your total basis is when you file your return. Just because you did not get a 1099-S, which you should get assuming you did not lie and sign the exemption form, does not give you cause for not reporting it, and that alone will not get you out of the penalties and interest.</p><p></p><p>Is it possible that you don't report it and they never find out? It is possible, however if you do get picked for anything, your looking at the tax due, plus interest (variable but accrues daily until paid in full), plus penalties (25% failure to pay), plus substantial understatement of income tax penalty (additional 20% on top of the failure to pay), etc etc. If the agent is having a really bad day they can try to tack on tax fraud bullshit to scare you.</p><p></p><p>They would have at least 6 years to examine the return since your likely underreporting income by over 25% on with a 330k taxable gain not shown.</p><p></p><p>Under an audit you are responsible for giving them receipts. Closing statement for the purchase of the land, contract to build the house, contract for the pool, bank statements for the payments, closing statement on the sale of the house to show the commissions, Etc etc. If you have zero of that, it would be up to the agent to agree to the amount your claiming.</p><p></p><p>I wouldn't sign your tax return without it being on there as it will subject the preparer to additional penalties as well.</p><p></p><p>If your preparer really believes you don't owe tax and the sale does not need to be reported, send them an email saying "I bought the house in 201x for XXX we sold it in 2021 for xxx we have a 830,000 gain on the sale and in your professional opinion we do not have to report this on Schedule D of the 1040." Keep their response printed with a copy of everything. Then if you get audited sue him and go after his malpractice insurance. That should cover the penalties, I would need to check my policy to see if it covers the interest as I really don't know.</p><p></p><p>Edit: I really don't care if you report it or not. I just don't want others to think the reasons your preparer is giving you are correct. Its your money and you do with it as you please, just try to cover your ass with it all in writing, and don't give the preparer an out by saying no it was a misunderstanding he told me it was no gain etc etc, if its not in writing it didn't happen.</p><p></p><p>I spent a couple years working with a lawyer at my last public firm that handled a lot of tax fraud cases that were mainly "preparers" that had no credentials or no idea wtf they were doing and blamed the clients on lack of info. A few clients we kept out of jail, a few are still sitting there and I left that firm 7 years ago.</p></blockquote><p></p>
[QUOTE="sleek98, post: 16708752, member: 144145"] You tell the IRS what you sold it for and what your total basis is when you file your return. Just because you did not get a 1099-S, which you should get assuming you did not lie and sign the exemption form, does not give you cause for not reporting it, and that alone will not get you out of the penalties and interest. Is it possible that you don't report it and they never find out? It is possible, however if you do get picked for anything, your looking at the tax due, plus interest (variable but accrues daily until paid in full), plus penalties (25% failure to pay), plus substantial understatement of income tax penalty (additional 20% on top of the failure to pay), etc etc. If the agent is having a really bad day they can try to tack on tax fraud bullshit to scare you. They would have at least 6 years to examine the return since your likely underreporting income by over 25% on with a 330k taxable gain not shown. Under an audit you are responsible for giving them receipts. Closing statement for the purchase of the land, contract to build the house, contract for the pool, bank statements for the payments, closing statement on the sale of the house to show the commissions, Etc etc. If you have zero of that, it would be up to the agent to agree to the amount your claiming. I wouldn't sign your tax return without it being on there as it will subject the preparer to additional penalties as well. If your preparer really believes you don't owe tax and the sale does not need to be reported, send them an email saying "I bought the house in 201x for XXX we sold it in 2021 for xxx we have a 830,000 gain on the sale and in your professional opinion we do not have to report this on Schedule D of the 1040." Keep their response printed with a copy of everything. Then if you get audited sue him and go after his malpractice insurance. That should cover the penalties, I would need to check my policy to see if it covers the interest as I really don't know. Edit: I really don't care if you report it or not. I just don't want others to think the reasons your preparer is giving you are correct. Its your money and you do with it as you please, just try to cover your ass with it all in writing, and don't give the preparer an out by saying no it was a misunderstanding he told me it was no gain etc etc, if its not in writing it didn't happen. I spent a couple years working with a lawyer at my last public firm that handled a lot of tax fraud cases that were mainly "preparers" that had no credentials or no idea wtf they were doing and blamed the clients on lack of info. A few clients we kept out of jail, a few are still sitting there and I left that firm 7 years ago. [/QUOTE]
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Road Side Pub
Thoughts on Real Estate- bubble burst or not?
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