My dad called yesterday to say that he'd received the documents, and that the checks were cut. He made the energy guy read the amounts to him over the phone so he could assure us it was the full amount we were expecting.
This morning he emailed to say that the signed, notarized forms were in the mail to the energy company. As soon as they receive it they'll send out the checks.
This possibility has been looming over me for so long (well over a year) that I find it hard to believe it's finally going to happen!
I emailed my tax guy to get his take on how much to send to the IRS. I did a little calculator a while ago and came up with $20,000. I also saw on some tax advice website that income over my and NT's regular income would be taxed at the 28% rate (so $22,400), and the MN website says that bracket is 7.05% ($5,640). So if I don't hear back from the guy, should I just send the IRS $22K and MN $5600?
The WV money is coming soon! Question for tax experts
June 9th, 2015 at 04:23 pm
June 9th, 2015 at 04:56 pm 1433868980
If you own a share in the property, how and when did you acquire it? If your dad gifted it to you, you may have a capital gain tax to pay.
You should talk to your CPA before you write any checks.
June 9th, 2015 at 05:20 pm 1433870459
June 9th, 2015 at 05:22 pm 1433870573
If this *is* a gift, he can get around the yearly gift limit by dividing it up into $14k chunks. I don't know what the total is, but he could write a check to all three of your for $14k each, and your mom could write one for $14k. That gets you to $84k without having to deal with gift exemptions. Couple probably write checks to the kids, too.
(I'm sorry to say that I can't remember if you've ever mentioned your mom - if she has passed or they are not together, please accept my apologies.)
June 9th, 2015 at 05:24 pm 1433870645
Did you consider yourself to be an owner of this property before all this happened?
June 9th, 2015 at 05:24 pm 1433870677
June 9th, 2015 at 05:56 pm 1433872617
You might want to talk with an attorney who specializes in land right-of-way issues (although I think maybe you said your brother was dealing with one?) just to be sure. Also, you had mentioned that possibly up to 50% of the sale price would be for damage to the land, which might be treated differently than a capital gain. Also, if you're retaining legal ownership of the land, you'll need to adjust the basis when/if you sell the actual land in the future.
Worst case scenario, the entire $80K (or whatever) is taxable -- but it is taxable as as capital gain, not as ordinary income. So assuming you and NT are making less than $400K per year combined, the profit would only be taxed at 15%.
June 9th, 2015 at 06:00 pm 1433872833
In your shoes, I would call your father to ask him what is happening here. Then I would talk to the CPA BEFORE I did anything else.
June 9th, 2015 at 06:10 pm 1433873459
June 9th, 2015 at 06:12 pm 1433873538
Thanks for all your input, everyone!
June 9th, 2015 at 06:31 pm 1433874673
June 9th, 2015 at 10:20 pm 1433888434
June 10th, 2015 at 02:32 am 1433903557
June 10th, 2015 at 11:31 am 1433935916
June 10th, 2015 at 12:09 pm 1433938146
June 10th, 2015 at 02:03 pm 1433945016
June 10th, 2015 at 02:35 pm 1433946955
June 10th, 2015 at 03:18 pm 1433949503
June 10th, 2015 at 03:30 pm 1433950239
P.S.S. How exciting!! Tax or no tax, it's exciting for this to come to fruition.