> some of you seem to understand but some of you do not so I
>> will explain further.
> It seems to me that the consensus is that you need to show that
> you were a no-equity partner in this all along.
>> ...
>> Our expected profit was only going to be around $100,000.
>> While I was doing this we found someone that offered us
>> $300,000 for the land. We only paid $40,000 for the land.
> So at that point, you each stood to make $130,000.
>> This is when my brother got greedy. He had heard that a
>> verbal agreement was only binding for one year.
> In what State? Maybe he should sue whoever told him.
Montana. I do not know whoever told him but the deal is that a verbal agreement is only valid for 1 year if it is not acted upon by either party. In this case he acted upon it by putting up the money to buy the land. I acted upon it by divulging the location of the land, showing timber buyers the trees and trying to negotiate timber sales. > >> It was obvious that he was going to lose so he settled with >> me. In that settlement agreement it was stipulated that the >>
timber would be sold as soon as possible and then the land
> sold. I found a buyer that was willing to pay $340,000
only >> for the timber. He refused to sign.
So now it's at $150,000 and he reneged on a signed
> agreement this time.
Actually more than this since the $340,000 was only for the trees and I was entitled to half of the sale price of the land also. After the logging took place the land is more valuable because roads are built through the property by the logging company where no access was available before.
> Then the timber market dropped. He ended up hiring a logger
>> to cut the trees so I filed a lawsuit against him. The logger told
>> me that my brother received over $100,000 from the timber
>> sales. My father is dying of cancer and he asked that this fight
>> be settled before he dies. To honor his wishes I agreed to settle
>> for 80 acres to be transferred into my name. I now have a person
>> that wants to buy it for $120,000.
> So you are up $120,000 less legal fees and selling expenses. Since
> you only expected $50,000, you're ahead of the game plus you know
> better than to deal with < expletives deleted > again - who by the
> way is up $260,000 less legal fees and selling expenses.
Yes i am ahead of the game but not as much as i should have been. Also this has taken 12 years to get settled.
Your brother is fortunate he is not my brother. My father would, at
> a minimum, would have disowned him - and he has done that.
My father has disowned him. He rarely speaks to him even though he is dying. Every time my mother speaks to him she tells him to be a man and live up to his agreement.
> I have no problems paying long term capital gains on the
>> entire $120,000 but I do not want to pay personal taxes on
>> this money. If it comes to that, I will wait to sell.
> As far as I can tell, you got this land as part of an unwritten
> partnership agreement so it's a capital gain. You may need
> to revise prior years 1040's to deduct the legal fees as a
> business expense..
Ok. thank you for the advice. I will go ahead with the sale of the land and claim long term capital gains. Revising prior years may be more trouble than it is worth. I do not want to open more of a can of worms with the IRS than I already am unless that would strengthen my claim of long term capital gains. Also this has been going on for 12 years so i don't think you can go back that far can you ??
BTW, I wonder if he declared the $100,000+ from the timber
> sales on his tax return. If he did, maybe he deducted the
> $40,000 land cost from it? If you'd cheat your own family,
> why not the IRS?
I am sure he would cheat any one including the IRS.
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