5405 House sold

[JohnH]

I think the unamortized points have to be written off as an itemized deduction in the year the loan is paid off, but will be interested in what others have to say about it.

[taxmom34]

i agree with JohnH as far as the points

[Possi]

Any others?

i agree with JohnH as far as the points

Is that your final answer? I would like to phone a friend!

oh wait. you ARE my friend!!

Either way, it will benefit her, so I'm good....

[joanmcq]

All the negative amortization stuff with the loan, fees, penalties, etc, don't add to the basis, nor are they selling costs. Just because she had to come up with cash at the closing doesn't mean she had a loss on the sale.

Did she refi? Cash out along the way (cashing out includes folding the costs of the new loan into the new loan).?

[Possi]

Interest

I feel like it was interest in the payoff, so I did not venture to overstate the selling expenses by the inflated payoff.

I only took exactly what was clearly, and I mean CLEARLY basis and selling value.

She did not understand that she had a gain, but she really trusts me to do what is right, and she is not disappointed.

If I erred, it is on the side of conservative.

I am sending in details with the closing statements and my summation to be sure the paper return flies without a hitch.

Once again, I am eversothankful for this extended office. Otherwise, I would be putting less-than-professional returns out there. I truly would have taken her word for it and let it fly mostly because I am so friggin TIRED.

thankyouthankyouthankyou from the bottom of my pea-pickin' heart.....

[JohnH]

Maybe it's just me, but I'd still have her get me a transcript of the loan activity for the entire period, even if it's after the return is submitted. Armed with that info, you'll know exactly what happened and be better prepared to furnish answers if any nit-picky questions show up from IRS. If you wait until the info is cold, you'll find yourself going through this entire exercise all over again, and under some pressure at that time.

[S T]

Me too

I agree with John H, I would get a transcript of the loan activity. There have been so many really "odd" loans out there, it could have been in default, it could have been a loan modification, it could have been one of those loans where the taxpayer could pick and choose out of several payment plans whereby the full loan payment was not paid and converted to negative amortization.

I would rather have the info in my hands now for future reference, if in fact it is ever needed or required. Who knows she might not be your client in a year or two, and what if the lending institution changes , merges, goes defunct, etc. Trying to access those records in a year or so could prove to be really difficult and challenging.

Sandy

[Possi]

Duly noted!

I'll get that information for my files. Thanks.