Capitol gains question

[Rhiannon10]

What is tWhat is the name of your state (only U.S. law)? California
I will try to write this as brief and to the point as I can.. in 1984 my husband was offered to purchase this property that we had rented for one year. He did not get anything in writing (which was stupid, I know) but this was the deal, the owner wanted $10,000 and payments made on the first mortgage and the second mortgage that the owner took out on the property to purchase a grocery store in Arkansas. My husband paid the $10,000, paid off the second mortgage, to the bank, and just now finished paying off the first mortgage, which this money went to the inheritors of the property that the owner was buying from. He also paid the property taxes except for the last 10 years in which the owner did pay them recently. My husband has the money to reimburse him, but that is beside the point. Okay now, this man has filed papers evicting my husband and he is stating that we were only renting. Well it is going to lawyers right now and it will be settled soon. This is my question, if we were supposedly renting all this time, wouldn't the owner have had to claim any of this money paid on his income taxes as income or capitol gains? And if he did not, what then? Please need answer as soon as possible.What is the name of your state (only U.S. law)?

 

[davew128]

Excuse me, why do YOU need an answer as soon as possible. The landlord's tax treatment of the payments to the them are absolutely 100% none of your business.

 

[LdiJ]

Excuse me, why do YOU need an answer as soon as possible. The landlord's tax treatment of the payments to the them are absolutely 100% none of your business.

Dave, you are incorrect in this instance. How the receiver of the money treated the money for tax purposes would go towards "intent". They are in a lawsuit, so it absolutely IS their business.

OP, yes, if you were considered to be a tenant rather than a purchaser, the "rent" would be income to be reported on Schedule E.

 

[Kiawah]

If you were paying off a mortgage, you should have been claiming interest as a deduction on your tax returns all of these years, as well as the property taxes.

Without and purchase or loan paperwork signed, certainly looks on the surface like you were just renting.

 

[davew128]

Dave, you are incorrect in this instance. How the receiver of the money treated the money for tax purposes would go towards "intent". They are in a lawsuit, so it absolutely IS their business.

I see only that it "went to the lawyers" which to me sounds like a negotiation not a lawsuit. More directly, absent a court order requiring disclosure of filed tax returns it still isn't any of the OP's business.

 

[LdiJ]

I see only that it "went to the lawyers" which to me sounds like a negotiation not a lawsuit. More directly, absent a court order requiring disclosure of filed tax returns it still isn't any of the OP's business.

If a lawsuit is filed, there is such a thing as "discovery" and it would be a totally valid for it to be part of discovery. It would not necessarily require a judge's order for them to produce it.

This is absolutely going to end up as a lawsuit. Anyone who makes a down payment on a property and pays off the mortgages believing that they own the property, cannot afford to just walk away because the heirs of the party they had the handshake contract with don't want to honor it.

 

[davew128]

If a lawsuit is filed, there is such a thing as "discovery" and it would be a totally valid for it to be part of discovery. It would not necessarily require a judge's order for them to produce it.

This is absolutely going to end up as a lawsuit. Anyone who makes a down payment on a property and pays off the mortgages believing that they own the property, cannot afford to just walk away because the heirs of the party they had the handshake contract with don't want to honor it.

And UNTIL there is a lawsuit, the other party has absolutely no obligation to tell or show the OP a thing about the tax returns.