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Subject Author Date
Income from Confidentiality Agreement on sale of home taxable? satitiger 03-04-2007
Posted by satitiger on March 4, 2007, 9:09 pm
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 A hospital in our area is purchasing peoples homes and they
are paying them $$ to sign a confidentiality agreement
regarding the sale terms. They are telling them that the $$
is not taxable. It is not included on the settlement
statement for the home purchase/sale it is just given to
them in a separate check. They are also paying out funds for
access to the property. Is this taxable?

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Posted by Stuart A. Bronstein on March 6, 2007, 5:25 am
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 satitiger@excite.com wrote:

> A hospital in our area is purchasing peoples homes and they
> are paying them $$ to sign a confidentiality agreement
> regarding the sale terms. They are telling them that the $$
> is not taxable. It is not included on the settlement
> statement for the home purchase/sale it is just given to
> them in a separate check. They are also paying out funds for
> access to the property. Is this taxable?

Does the agreement include a clause saying that the fact
these payments are being made is also confidential???

Stu

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Missy on March 6, 2007, 5:25 am
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satiti...@excite.com wrote:

> A hospital in our area is purchasing peoples homes and they
> are paying them $$ to sign a confidentiality agreement
> regarding the sale terms. They are telling them that the $$
> is not taxable. It is not included on the settlement
> statement for the home purchase/sale it is just given to
> them in a separate check. They are also paying out funds for
> access to the property. Is this taxable?

It depends. If the person(s) lived in the home and were
single, any profit from the sale of the home under $250K is
tax free. If they were married and lived in the home the
figure is $500K. They have to have lived and owned the home
for two of the previous five years.

Missy Doyle

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Paul Thomas, CPA on March 6, 2007, 5:25 am
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> A hospital in our area is purchasing peoples homes and they
> are paying them $$ to sign a confidentiality agreement
> regarding the sale terms. They are telling them that the $$
> is not taxable. It is not included on the settlement
> statement for the home purchase/sale it is just given to
> them in a separate check. They are also paying out funds for
> access to the property. Is this taxable?

Hospitals don't give out the best tax advice now, do they.

It's taxable income, if not included in the capital gains of
the house and otherwise exempted under Section 121.

I'd want it on the closing statement to prove it's exempt
under 121 (if that's the case) instead of an under the table
transaction.

--
Paul Thomas, CPA
paulthomascpapc@bellsouth.net

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Bill Brown on March 6, 2007, 5:25 am
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satiti...@excite.com wrote:

> A hospital in our area is purchasing peoples homes and they
> are paying them $$ to sign a confidentiality agreement
> regarding the sale terms. They are telling them that the $$
> is not taxable. It is not included on the settlement
> statement for the home purchase/sale it is just given to
> them in a separate check. They are also paying out funds for
> access to the property. Is this taxable?

Either the amouts are taxable or they are part of the sales
proceeds where the nature of the property in the seller's
hands determines taxability.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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