We sold our house to a hospital and they paid for the house and then additional money that they considered a settlement/damages for having us move, as we did not want to sell our house and they wanted it to build a new part of the hospital. They said that this would not be taxable. Is this correct?
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I would consider the "extra" money as an adjustment of the selling price, which increases your gain on the sale. As long as you meet the Sec 121 qualifications (owned/resided 2 of last 5 years), and the gain is less than $500,000, it's all tax free. If the gain is higher, the excess will be taxed at a maximum of 15%.
Hospitals are now giving tax advice?
Will you go to a CPA (EA or other tax professional) for medical advice? Your post doesn't give sufficient info to make any determination as to whether there is taxable income in your situation. ___________________________________
-----> real address on hobokeni or hobokenx
As long as the total amount they paid was for the purchase of the house (house selling price) and the gain on the sale (total selling price - basis of home) does not exceed exemption amount you qualify for, then none of the amount received is taxable.
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