Central District Consumer Bankruptcy Attorney's Association

You might have a good argument for "recognizing" the gain in a later year. It probably hinges on whether or not money sitting in an escrow account that a judge won't release is considered "received" or not. Since the TP isn't free to control the funds, he may not have receipt (constructive or actual) of the funds, and, therefore, may not have to recognize the gains until he has control. "Substantial restrictions" on use of the funds can be an argument for lack of receipt. I agree that the gains were "realized" when escrow closed.
"David A. Tilem" wrote:
How does this square with the rule on installment sales contracts - income received in year received, each installment to be allocated between return of basis and gain?

David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800

* Bankruptcy specialist cert. by State Bar of CA Bd of Legal Specialization.
Business bankruptcy specialist cert. by Amer. Bd. of Certification

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Your example would not be an installment sale, the sales price is paid in full. There is just as squabble between the divorcing husband and wife as to who gets what.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868
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On Tue Feb 19 13:33 , 'David A. Tilem' sent:

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charset="windows-1251"
How does this square with the rule on installment sales contracts - income
received in year received, each installment to be allocated between return
of basis and gain?
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.

The post was migrated from Yahoo.

The year the property was sold is the year in which it is income. The closing date is the date the gain is realized. The fact that a court ordered it held in escrow to determine division between the spouses is irrelevant to the IRS for calculation of capital gain.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED RECIPIENT OF
THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED TO BE PRIVILEGED BY
LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION,
DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED. PLEASE NOTIFY
US IMMEDIATELY OF THE ERROR BY RETURN E-MAIL AND PLEASE DELETE THIS
MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.
On Tue Feb 19 12:59 , 'David A. Tilem' sent:

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charset="windows-1251"
Husband & Wife are getting a divorce
Court orders residence to be sold and proceeds held pending further Court
order
Property is sold, title passes and money is sitting in escrow.
Assume gain is enough to make income taxes due
Question: When is tax due - in the year the sale closed or the year in which
the fund are released
(my bet is on when the funds are released)
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
charset="windows-1251"
Message
Husband & Wife are
getting a divorce
Court orders residence to
be sold and proceeds held pending further Court order
Property is sold, title
passes and money is sitting in escrow.
Assume gain is enough to
make income taxes due

Question: When is tax due -
in the year the sale closed or the year in which the fund are released
(my bet is on when the
funds are released)

David A.
Tilem
Certified Bankruptcy
Specialist*
The post was migrated from Yahoo.