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Income from sale of home

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I’m 67, single, and I have a student loan currently totaling nearly $80,000 from a masters degree I earned in the late ‘90s. I have been on IBR for several years now with a $0 payment because I am living almost exclusively on Social Security. I have equity of around $90,000 in my condo. That, plus a $10,000 IRA, represents my entire life’s savings.

If I were to sell, how would the $90,000 windfall affect my student loan payment?

Would my monthly payments for the year in which I receive it be based on that amount plus my Social Security, and would it affect me beyond that year?

Would it make any difference if I used the $90,000 toward the purchase of a new home?

Thanks!

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I have the same question.  We sold some inherited property at a loss but did get cash.  Everything seems to indicate they will look at the AGI from the tax return but am concerned they will look at the proceeds of the sale even though it was at a loss.  It appears the sale of your condo would not do anything to your AGI but, yes, I would be concerned about them wanting to throw in the gross receipts in to the calculation.  I hope someone who KNOWS will chime in.

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Nick, your reply helped me clarify my thinking on this. In my case, I would expect to realize a profit of perhaps $20,000 on the sale of my condo. That amount would be income, but not subject to income tax. The remaining $70,000 is a longstanding asset that would have been made liquid through the sale. It would make sense to me that the profit would be considered as income for student loan repayment purposes, but I hope somebody can clarify whether or not the $70,000 would enter into the equation, and if so, how.

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I’m still researching it.  We sold a couple of properties.  One with a gain, one with a larger loss.  Tax-wise, we are fine.  I wonder if looking at the return if they JUST look at the AGI or dig into the guts of it and see that we did walk away with some cash they will try to get,  Still looking.

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pangloss - 08 January 2016 10:11 AM

Nick, your reply helped me clarify my thinking on this. In my case, I would expect to realize a profit of perhaps $20,000 on the sale of my condo. That amount would be income, but not subject to income tax. The remaining $70,000 is a longstanding asset that would have been made liquid through the sale. It would make sense to me that the profit would be considered as income for student loan repayment purposes, but I hope somebody can clarify whether or not the $70,000 would enter into the equation, and if so, how.

If you’ve been living there 2 out of the past 5 years, none of it should show up on the form 1040.