Most of the time, profits on a home sale are not taxed
Q. How old do you have to be to qualify for that homesellers tax break? Also, what is the legal age to become a senior citizen? 55, 62, 65? This is always confusing.
A. You bet it is. You can join the American Association of Retired Persons at 55. For a discount at my drugstore, you need to be 60. Social Security retirement is available at 62. And you must start withdrawing from retirement accounts at age 70½.
At any rate, there’s no longer any age requirement for using that lovely federal tax break. It lets you sell your principal residence and take your gain tax-free, up to a profit of $500,000 for a married couple or half that for a single taxpayer. The only requirements are that the property has been your main home for at least two of the five years before your sell, and that you haven’t used this tax break on another home in the past two years.
Speaking of old, perhaps you’d like to look at my new blog: www.86andholding.blogspot.com.
Q. My husband bought his house before we were married. We’ve been splitting the bills since I moved in, and we’ve been married for ten years now. I’m not on the deed. He doesn’t have a will. What would happen to the house if something happened and he passed? He does have family, parents, sister and brothers. Just wondering.
A. Not sure whether by “family” you mean children, and not sure what state you live in. So I’d suggest you look up the rule for distributing the estate yourself. Just Google the name of your state and the word “intestate,” which means “without leaving a will.”
Q. My daughter and her boyfriend are looking to buy a house. The house is located on 5 acres and is beautiful inside and out, but the land is completely the opposite. It is located on a highly erosive soil. Although the front yard is decent, the backyard is built on land with a slope that starts less than 20 feet behind it. My concern is that the house may eventually slide down the hill or receive some other kind of damage. However, the agent said they would not be permitted to sell a house if there was a chance of that happening, and as long as none of the trees are removed there should be no problem. My daughter says I worry too much but this is a major investment and I would really appreciate your opinion.
A. My opinion is that unless this “major investment” is your investment, you should relax and stay out of it. My further opinion is that when two unmarried persons buy a house together, they should consult a lawyer ahead of time, to draw up a written agreement about what would happen with the property if they ran into trouble later on.
Oh, and about the house sliding down the hill — I suppose they could consult the local building bureau for information, or hire an engineer to inspect. But they’re protected. No bank would make a mortgage loan if there’s danger of a landslide or if they can’t get insurance coverage.
Q. My son and his wife are getting a divorce. They own a house and she was supposedly making payments, but my son found out just recently that she has missed payments with late fees. She has done modifications and instead of having 21 years left to pay on the loan, now they have a 30-year mortgage. Also on one of modifications she forged my signature. What is the best way to take care of this mess? Should he let the lender start foreclosure, do a deed in lieu of foreclosure, or short sale? Son is now living in the house, but can’t afford the payments. Hopefully you can give us an answer as to what he should do.
A. Your son should have a lawyer if he’s getting a divorce, and he should follow his attorney’s advice
Q. I just read your advice to a homeowner with a bad back who was dealing with a neighbor’s bamboo. You should have mentioned that the owner did have the option of seeking remedy in court, as “nuisance” cases involving trees, etc., have been well documented in all 50 states. I am currently doing so with a neighbor (a rental and absentee owner, unfortunately) who has a black walnut tree overhanging my property and who also had a forest of giant bamboo that adversely impacted a number of adjoining properties. They removed the bamboo but left the tree.
A. Interesting.
Ÿ Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (include a stamped return envelope), or readers may email her through askedith.com.
© 2012, Creators Syndicate Inc.