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MandyKes27
November 4, 2024
Question

How to categorize the sale of an asset that I didn't purchase

  • November 4, 2024
  • 1 reply
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About 8 years ago my husbands parents moved to a retirement community in FL and purchased a mobile home there. His dad has been in tax trouble for years and forged my husbands name on the mobile home without his consent. I am assuming the reason was so if the IRS came after him, they would not take that asset. The mobile home was paid for in full with cash.

My husbands dad owed us about $50,000 dollars. This past year they decided to sell the mobile home, in order to do so, the sale needed to go through my husband so my husband received a check for $25,000 and his dad agreed to us keeping it to settle some of his debt to us.

My questions is, how do we go about categorizing this in quickbooks and then how would we report this for taxes? My husband is self employed and we run a small business (LLC). I typically do all of our taxes because it's fairly straight forward, but for this I am very uncertain of how to record this lump of money that went into our account.

Any help is appreciated. Thanks!

1 reply

Rainflurry
Rainflurry
November 5, 2024

@MandyKes27 

 

Yikes, that's a messy situation.  I would strongly suggest you seek the help of a good CPA/tax accountant.  There's a lot to consider.  Was there a gain on the sale of the mobile home?  Do you have anything to support that your father-in-law (FIL) owes you $50K?  Was the money given to your FIL as a loan or a gift or was that not discussed?  From what I understand, loans to family members over $10K need to carry interest, otherwise it's viewed by the IRS as tax avoidance.  

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