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The bank is taking my entire paycheck...

Started by Lawrence Wright7 · · 👁 5 views · 405 replies

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Lawrence Wright7 Lawrence Wright7 Active MemberOP
96 messages
joined Mar 2010
#401 ·
Hey everyone, now I’ve gone and run into yet another headache...
I just cannot seem to shake this nightmare regarding that miserable apartment 😠

To make a long story short:
Back on April 4, 2008, I took out a mortgage to buy my very first place—a 745 sq. ft. studio. I applied for the first-time homeowner tax exemption, which I actually got (though I’m still waiting on the paperwork for the "excess" square footage they promised me back then)
But look, things went south fast. I couldn't keep up with the mortgage, interest rates started climbing, my monthly payments dropped, and I was backed into a corner. I HAD to sell. So, on March 30, 2011, I sold it through a government housing program.
Well, I recently received a lovely little "gift" from the IRS stating that I owe them $9000 (which is 5% of the sale price) simply because I sold the property within five years of buying it.
*1-The unit was bought from a developer LLC who built these new condos on a lot that dates back to about 1968. It’s a new build on old land. They haven't sent me the final bill yet, claiming it's coming. At the local tax office, they hinted that I might be able to pay a lower rate based solely on the land value or some other technicality... but who knows how that works?.....?????
*2-I also found out that the laws changed on February 25, 2011, and now that holding period requirement has been dropped to three years.
I marched down to the tax office in person and pointed out the NEW REAL ESTATE TRANSFER TAX ACT, specifically citing Article 27.a, which basically says😢in short, for items registered before this Law took effect where a decision hasn't been finalized, the new Law applies...
When I brought that up, the bureaucrats there told me that maybe the new law could catch me too. Apparently, according to their math, I am missing exactly five damn days to hit that full three-year mark—even though I have clearly been registered at that address for much longer than three years!
*3-Furthermore, in the sales contract signed on April 4, 2008, it explicitly states that the SELLER is responsible for all real estate transfer tax costs.
I pointed that out too, but they just looked at me blankly and said they don't deal with cases like this and aren't sure what to do—they just told me to file an appeal.
*4-And let's be real here: I was forced to sell that place because my life was hitting rock bottom financially. My paycheck is already being eaten alive by half for child support and garnishments for past-due alimony. I don't own any other property. I explained all this to the tax office, and they suggested I ask for a debt waiver due to "inability to pay," though I didn't quite grasp what that entails.
My question is: I am definitely going to appeal, but what legal grounds should I use and how do I go about it???

Thanks in advance, everyone.
I've only got a 10-day window left.
shadowcanyon3 shadowcanyon3 Newcomer
6 messages
joined Jul 2011
#402 ·
Lawrence Wright7 said:Hey everyone, now I’ve gone and run into yet another headache...
I just cannot seem to shake this nightmare regarding that miserable apartment 😠

To make a long story short:
Back on April 4, 2008, I took out a mortgage to buy my very first place—a 745 sq. ft. studio. I applied for the first-time homeowner tax exemption, which I actually got (though I’m still waiting on the paperwork for the "excess" square footage they promised me back then)
But look, things went south fast. I couldn't keep up with the mortgage, interest rates started climbing, my monthly payments dropped, and I was backed into a corner. I HAD to sell. So, on March 30, 2011, I sold it through a government housing program.
Well, I recently received a lovely little "gift" from the IRS stating that I owe them $9000 (which is 5% of the sale price) simply because I sold the property within five years of buying it.
*1-The unit was bought from a developer LLC who built these new condos on a lot that dates back to about 1968. It’s a new build on old land. They haven't sent me the final bill yet, claiming it's coming. At the local tax office, they hinted that I might be able to pay a lower rate based solely on the land value or some other technicality... but who knows how that works?.....?????
*2-I also found out that the laws changed on February 25, 2011, and now that holding period requirement has been dropped to three years.
I marched down to the tax office in person and pointed out the NEW REAL ESTATE TRANSFER TAX ACT, specifically citing Article 27.a, which basically says😢in short, for items registered before this Law took effect where a decision hasn't been finalized, the new Law applies...
When I brought that up, the bureaucrats there told me that maybe the new law could catch me too. Apparently, according to their math, I am missing exactly five damn days to hit that full three-year mark—even though I have clearly been registered at that address for much longer than three years!
*3-Furthermore, in the sales contract signed on April 4, 2008, it explicitly states that the SELLER is responsible for all real estate transfer tax costs.
I pointed that out too, but they just looked at me blankly and said they don't deal with cases like this and aren't sure what to do—they just told me to file an appeal.
*4-And let's be real here: I was forced to sell that place because my life was hitting rock bottom financially. My paycheck is already being eaten alive by half for child support and garnishments for past-due alimony. I don't own any other property. I explained all this to the tax office, and they suggested I ask for a debt waiver due to "inability to pay," though I didn't quite grasp what that entails.
My question is: I am definitely going to appeal, but what legal grounds should I use and how do I go about it???

Thanks in advance, everyone.
I've only got a 10-day window left.

Which city did you buy and sell the place in?
What kind of tax office tells you "we haven't seen a case like this, so we don't know what to do"? That's incompetent. 🤷

I think you should push hard on point 3: if that was the agreement with the seller, then the seller needs to foot the bill!
There should be freedom of contract regarding who bears the burden of the transfer tax... If nothing is specified, the buyer usually pays, but if the contract stipulates otherwise, that's the rule of law.
Benjamin Rodriguez2 Benjamin Rodriguez2 Member
44 messages
joined Jun 2008
#403 ·
http://www.irs.gov/taxpayers/real-estate-transfer-taxes...5.asp?id=b02d1

4.2 REAL ESTATE TRANSFER TAX
THE PERSON LIABLE FOR PAYMENT The property acquirer
redowl83 redowl83 Newcomer
2 messages
joined Jul 2011
#404 ·
Might be late to the party, but maybe this helps:

Section 6.
(1) The person acquiring the property is the one liable for the real estate transfer tax.

Section 11a
(6) That real estate transfer tax mentioned in paragraph 1, which the citizen was exempt from, becomes payable if, within 3 years of acquisition:
1. the citizen sells or rents out the property, either fully or partially.

Section 14.
(1) The tax liability kicks in the moment the contract or other legal agreement for the property acquisition is signed.

Section 20.
If the seller took on the responsibility to pay the transfer tax in the contract, they’re jointly liable with the buyer for that payment.

Section 25.

(2) To make sure the real estate transfer tax or sales tax is calculated right, the provider has to provide the data regarding the base amount used for those taxes.

Look, you're the taxpayer here. The IRS would only go after the seller as a guarantor if they couldn't get the money from you. Also, the seller would only have to cover that gap between 50m2 and 69m2 because you've been in there longer under a different basis, since you flipped or rented the place within 3 years. I guess the reason you haven't received that first decision regarding the exemption and then the obligation for the 19 m2 is probably because you didn't submit the attachment to the contract—the part where the price is broken down into land value, utility fees, and the actual construction part. Of course, this assumes the seller was registered for sales tax. You'll have to shake that attachment down from the seller. If you get it, the tax is calculated at 5% on the land and utility portion, which might end up being around 1-2% of the total apartment value. As for how long you've lived there versus when the contract was signed? I mean, did the seller let you move in before the deal was actually signed? The law is pretty clear that the obligation starts when the contract or legal deal is made. So, yeah, go demand that contract attachment from the seller and insist they hand it over immediately (again, only applies if the seller was in the sales tax system at the time).

Good luck. Hope this apartment finally stops giving you grief.
Justin Bennett572 Justin Bennett572 Newcomer
1 message
joined Jul 2011
#405 ·
So, I’m about to become a co-signer on a mortgage. Some lady at the bank keeps insisting that my personal assets won't be touched if the loans go south—since I didn't put anything up as collateral—but honestly? I’ve got a bad feeling about it. I've heard that when you're dealing with big institutions like Chase, they always find a way to catch you off guard. If anyone here is in the same boat (as a co-signer), or if there's someone who actually understands the legal loopholes regarding promissory notes and seizure orders, please reach out. I could really use some insight!
silvergull45 silvergull45 Member
24 messages
joined Aug 2011
#406 ·
Justin Bennett572 said:So, I’m about to become a co-signer on a mortgage. Some lady at the bank keeps insisting that my personal assets won't be touched if the loans go south—since I didn't put anything up as collateral—but honestly? I’ve got a bad feeling about it. I've heard that when you're dealing with big institutions like Chase, they always find a way to catch you off guard. If anyone here is in the same boat (as a co-signer), or if there's someone who actually understands the legal loopholes regarding promissory notes and seizure orders, please reach out. I could really use some insight!

Don't even think about it. Seriously. I mean, if she misses a payment, the bank can totally just garnish her wages, and if that doesn't cover enough to pay them back, they’ll move straight to seizing property.👎
I'm no expert, but I've seen something similar happen before.

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