I went through something very similar last year when I had to sell my condo after only 8 months due to a job relocation. Like others have mentioned, you won't owe any capital gains tax on a loss - that's the silver lining in this tough situation. One thing I wish someone had told me earlier: make sure to track ALL your selling expenses (realtor commissions, title fees, attorney fees, etc.) because those get added to your loss calculation. In my case, those expenses added another $8k to my deductible loss. Also, since you mentioned unexpected family issues, you might want to look into whether this qualifies as a hardship that could help with any early mortgage payoff penalties if you have them. Some lenders have provisions for genuine hardship situations. Best of luck with everything - I know how stressful this situation can be.

I'm sorry to hear about the difficult family situation you're facing. Just wanted to add one more perspective that might be helpful - since you've only owned the property for 2 months, you might also want to check if you have any recourse with your home inspection or if there were any undisclosed issues that could affect your loss calculation. Also, when you do sell, make sure to get a detailed HUD-1 or closing disclosure that clearly shows all your costs. The IRS will want to see documentation of your original purchase price plus any qualifying improvements or costs, and your sale price minus all selling expenses. Keep everything organized because if you do carry forward unused losses to future years, you'll need this documentation. One last thought - if this was going to be your primary residence, you might want to consult with a tax professional about whether any special rules apply since you never really got to establish it as your main home. The rules can get complex when life throws you curveballs like this.

Has your sister filed taxes in previous years? If she only made $8,700 last year, she might not even be required to file a return depending on her filing status. That could actually help your case for next year if she doesn't file as independent this year (though as others mentioned, you still wouldn't qualify for this year).

One thing to keep in mind for next year - even if your sister qualifies as a dependent, make sure she doesn't accidentally file as independent if she does end up getting a job. That's a common mistake that can mess up your dependent claim. You might want to coordinate with her on tax planning if she starts working again, especially around year-end. Also, if she's actively job searching, some of those expenses might be deductible for her (or you if she's your dependent), so keep track of things like resume services, interview travel costs, etc.

One thing nobody's mentioning - your state matters a LOT for withholding calculations. Different states have completely different tax structures that affect your overall tax picture. What state are you in?

Great question about state taxes! I'm in Colorado, so we do have state income tax here. I hadn't even thought about how that might affect my W4 calculations - I've been so focused on just getting the federal part right. Does the state tax situation change how I should fill out the federal W4, or is that something I handle separately? I assume Colorado has its own withholding form I'll need to complete as well? This is exactly the kind of detail that makes me nervous I'm missing something important!

dont hold ur breath. took 6 months total for me but they did eventually help. its like watching paint dry fr

Been through this process twice unfortunately. First time took about 10 weeks to get assigned, then another 6 weeks to resolve. Second time was faster - about 6 weeks total. The key is documenting everything and being persistent but polite. Also make sure you have all your paperwork ready when they do contact you because any delays on your end just restart the clock. Hang in there, they will eventually help but the timeline is definitely longer than what they initially tell you.

I'm confused about whether I need to issue a 1099 for a settlement. I own a small business and we settled a dispute with a customer for $4,500. Do I need to send them a tax form since we paid them?

Based on what you've described, the good news is that most of your $23,750 settlement is likely NOT taxable! Since this was from a car accident and the money was specifically for medical expenses and car damage, those portions generally aren't considered taxable income by the IRS. Here's the breakdown for your situation: - Medical expense reimbursement from physical injuries: NOT taxable - Car damage compensation (up to your basis in the vehicle): NOT taxable - Money sitting in your bank account from these sources: Also not taxable You should look for a 1099-MISC from the insurance company - if they didn't send you one, it's a good indicator they didn't report it as taxable income to the IRS either. The key question is whether any portion of your settlement included compensation for lost wages, pain and suffering beyond physical injuries, or punitive damages. If the settlement agreement specifically states it was only for medical expenses and property damage from physical injuries, you're in the clear. Keep all your settlement paperwork and receipts for the medical expenses and car repairs - you'll want documentation in case the IRS ever has questions. But for a straightforward car accident settlement like yours, you most likely don't need to report anything on your tax return.