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> I wonder by numbers how many of these people had ~no income, but had securities trades that with the cost basis ignored look like $400k of income? I think a
by teeray 3y ago
> I wonder by numbers how many of these people had ~no income, but had securities trades that with the cost basis ignored look like $400k of income?
I think a common misconception is that these measures target fat cats rolling in $400k+ in personal ARR. However, if you’re a retiree and just sold the family farm to downsize, then you could easily have $400k in income for a tax year.
- jpollock 3y agoIf someone just sold an asset and are reporting $400k in income, doesn't that mean they received $4 million in cash in the sale?
- bombcar 3y agoIncome is not income tax. Selling a property for $4 million is $4m in revenue which could be anything from negative to $4m in income.
- toomuchtodo 3y agoThe real estate escrow closer would notify the seller(s) they are providing the IRS with the transaction information (Form 1099-S). It is straightforward to either pay taxes on the gains (Schedule D and Form 8949) or demonstrate primary residence tax exclusion ($250k individually, $500k as married couple). This is not burdensome to verify. https://www.irs.gov/taxtopics/tc701 https://www.irs.gov/taxtopics/tc701