Dr. Friday Radio Show – February 28, 2026

But she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now. 737-WW-FC. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.

It’s an absolutely gorgeous Saturday out there. My girl is outside making sure that no one sneaks up on the property. Apparently, you’ll hear in the background. If you want to join the show, you can at 615. 737-9986, 615-737-9986 is the number here in the studio. We talk about taxes. I am an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. We have seen that a lot of the one big beautiful bill has helped out a lot of my tax people. Everyone will have their own. opinions on that, I suppose. Most people, if you’re in the the middle to low income, you will see benefits of the no tax on tips the uh tax uh extra tax or the refund on overtime as well as if you’re 65 and older getting that six thousand dollars And, you know, I mean again, some people will get more benefits. A lot of people still confused on how much of the overtime they’re able to take. Again, this is just the portion that is overtime. So if you make $10 an hour and overtime is $15, you’re only taking that $5 of overtime is the portion of overtime you’re able to deduct, but it’s still a good uh portion and it does work very well if you’re not sure uh how much you do need to either take a look at your final paycheck stub and or you need to contact your employer so they can make sure that whatever information you’re putting On your tax return is correct. I would not suggest I have um seeing a couple interesting things on the internet And I’m gonna be quite honest with you, I do not suggest guessing. I do not just say, oh, put whatever number you want, the IRS won’t know. You know Keep in mind the IRS has basically three years to go back and audit. They will be getting this information from employers. And if they do find it, guess what? You are responsible for all the information and even the information that a a tax preparer, let’s use that term instead of an enrolled agent because we don’t, but someone just throwing numbers on a return. So be careful. That will possibly or most likely come back and bite you. Okay. Looks like we’ve got Wayne in Jolton Um, this is Dr. Friday Show. Can I get you online?

I’m here.

Hello, sweetie.

Hello. Thank you for taking my call.

Sure.

I have a Sumner County property, maybe a capital gains question. My brother sold some property for $80,000. And will we have to pay capital gains on that?

Well is your does your brother pass away after he sold the property?

No, no, he’s he’s still very much alive. Okay, okay.

I didn’t mean to kill him off that fast. Um anyways, um it just depends on what his original basis is then so if he purchased the property for 80 and he sold it for 80 there’d be zero but if he purchased it for 40 000 let’s say held it for a number of years and now he got 80 000 he would pay tax on the difference or on 40 000 like that example Okay, this was inherited and given to the Okay, so does he when he inherited there would have been a basis or there should have been a basis established. So at the time of that person that passed away, within 30 days of their passing, when you to know what was that property worth if you don’t have any way of going back to appraisal you can usually look at property taxes that’s not always the best number but it is at least a viable number

So the property So would they have would he have paid taxes on that at the time he inherited it?

He wouldn’t have to. No. What he would have gotten is let’s say let’s just say um he passed the whoever died passed away a year ago. The property at the time of that passing was Worth $80,000. A year later, your brother sells it for $80,000. It would be zero tax. So what was the property? He needs to find out at the time of the property with whoever he received it from passed away. What was the value at that time? Oh okay. And then the difference between that and what he sold it for will be capital gains, if there is a difference.

And that’ll be paid to the IRS, right?

Yes, sir. And that will report on a schedule D on his personal return.

I’ve heard you plenty of times. Thank you for talking to me.

Hey, no problem. Thank you for calling. Okay, that was a good question. And um Go ahead, hang up. Um and I will say that is something that is sometimes confusing on when we inherit. And uh I I can’t put out enough. The best thing to do if if for some reason um it’s It’s a bad situation, but if some reason you have now inherited some property, or maybe you inherited it years ago, the best thing you could do is to get either a real estate agent, an appraisal company But you need to know what that basis is because otherwise the IRS is going to say your basis is zero. You didn’t purchase it, so you have no purchase documents. You inherited. What was the value of the property at the time? Time of inheritance. That’s what we need to know. Then it’s you know, many times I mean I have people claim losses because they’re not able to sell it for what it was worth with the time. Most of the time and tonight to see though we’re fortunate that our property doesn’t usually go down. It has a nice steady uphill um grade, at least at this point. But either way, you need to know and then if this property was not in the state of Tennessee, let’s say you sold you inherited a house in in Alabama, Kentucky, um they have state income tax. So you would also have to file a tax return there if there was a capital gains. So again in Tennessee, we do not, and just because you live in Tennessee, if you sell something in another state, there is normally a capital gains tax or a tax due at the time. of the sale. Inheritance-wise, most of the time we don’t pay anything, but at that time you will pay something and it will be time to have to do what you need to do, which is file taxes on it. So hopefully again, if you’re sitting on something You know, now before you decide to put it on the market would be a good time. So you’re not having to run around and try to figure it out after you’ve already sold it. And real estate agent um agents are really good. I have a number of them are friends, and especially if they’ve just sold the property, they can usually pull comps for when the person had passed away. So if you’ve just recently sold that property, you might be able to go back to the real estate agent, have them pull comps in that area. at the same time that the person passed away. So now you have something in writing that would say this is what it would have sold for back at the time that person would have sold at before they died. And then this is what you sold it for. You’ve got documentation to justify the numbers on your Tax return. All right. So let’s continue forward, making sure that we have everything we need to move forward on our life and trying to get to all of my emails. have been a busy day. But anyway, so if you um you’re working on your taxes, we are totally working on our taxes here. I will tell you uh at this point our calendar calendar is full to be honest, which is a blessing to have. Not always great when you’re always wanting to meet and help new people. If you’re a returning client, we usually have a space for you, but new clients, we won’t be able to do anything but file an extension and then help you out. But um either way, um if we can’t help you, we can try to refer somebody if we know of someone that um that’s available that hasn’t already has their calendar full. But if you have a tax question, maybe you’re doing your own taxes or maybe like the gentleman that just called, maybe someone you know has asked you a question and you’re like, I don’t really know how to handle this. Maybe I can help out. If nothing else, I can send you in the right direction. So you can find out what would be the best way. Because what you don’t want is the IRS changing your tax return. It does happen often actually. So you want to make sure that if there is a change, we got a letter from one of my clients. We amended a tax return. return in 2025 and the IRS sent back saying we need more documentation on that amendment, so give us more papers to justify why you’re changing the return this happens quite often and a lot of times people are like well i filed the tax return and they haven’t adjusted my things you need to make sure you’re not ignoring irs letters or if you’ve gotten a letter and you’re not sure how to respond so you don’t respond sometimes that can be a problem as well so just make sure that you’re dealing with your issues and moving forward with whatever you need need to move forward with. If you um do have a tax question, you can join us here, 615-737-9986-615-737 9986 taking your calls. As uh people that may not have heard this show before, my name is Dr. Friday. Friday being my first name not my last name um and i have a phd in economics there’s the doctor part but i do taxes i’m an enrolled agent that’s the important part of all of this because as an enrolled agent i can represent you in front of the Internal Revenue Service. I can help you file your taxes if you’ve received love letters, maybe you haven’t filed taxes in a number of years. Whatever might come with that, that’s where you you’re going to be able to help you make sure you can stay in compliance. Because remember, the IRS is a collection agency, a very powerful collection agency. But that is what their job is. So they basically are going to go out and try to collect what you owe them, be that through the the taking of your payroll, cleaning out your bank accounts, seizing properties. They have the authority to do all of that, but not just Today I’m going to seize your property. There has to be notification, communication. So keeping that communication open is the way you’re not going to have as much happen. But also staying in compliance Maybe you made a mistake back in 2015 or 2016, but you’ve always filed your taxes. You’re less likely to have as much really angry situation unless you basically have the ability to pay, but you’re not paying. And that’s sometimes an interpretation. Don’t get me wrong. I know that. I’ve gone through people’s paperwork and they’re like, I can’t afford to pay anything to the IRS, but yet They could because the IRSA doesn’t look at you paying off your credit cards every month being a way of taking care of credit card company isn’t something the IRS considers something you have to pay in full. Your child being in a private school. I had one that had three kids in private school owed the IRS, but the private school, the IRS doesn’t that’s a that’s a something, a luxury that you can put your child into. If you’re using IRS dollars to keep your child in private school, the IRS is going to look very badly on that Um, you know, if you have money stored in equity in your home, but yet you don’t want to take it out and you have the ability to do that, some people don’t. But these are the kinds of things you need to answer questions of you always hear these places say oh we can sell it for 10 cents on the dollar really not everyone can do that in fact a large number of my clients have to make make an actual deal. And we did one 320,000. We just closed. It was 116,000. He was very happy. We were able to resolve the issue, get it taken off. And that way he’s able to go back and move forward and rebuild his finances without the IRS being on his back. But it wasn’t going to be ten cents on the dollar. He had too much um invested in other ways. So you have to figure out what’s going to work, but you also have to deal with the IRS. You can’t just ignore them. They will find a way of being recognized in your life. All right, we’re going to take our first break. If you want to join the show afterwards, you can. 615-737-9986 615-737-9986. We’ll be right back with the Doctor Friday show. Alrighty, we are back here live in studio. You can join us if you want at 6 Six one five seven three seven nine nine eight six six one five seven three seven nine nine eight six taking names and uh taking numbers I don’t know what I’m taking. I’m obviously a little confused. Um, but if you want to join the show, you can. If you ask tax questions or if you’ve got something that you’ve been looking at, you’re trying to figure out which way you need to do it. Um, and deal with the situation. I had an email that came through during the break and it was from Kate and she was asking, she says she has three properties that she inherited and And she’s not had them yet transferred actually into her name because probate hasn’t happened. She wanted to know if she could claim the property taxes on them. And as for anyone that’s listening, if you have multiple properties You can’t always take the interest because if it’s not your primary home or secondary, you cannot take the interest. But property tax on any properties that you have can be added under the salt tax. So your home primary one plus any others And she’s just asking, can she deduct those since they’re not in her name? If she has proof that they are actually her properties just waiting for probate. and that they will be in her name and she paid from her own pocket, not from uh an estate bank account or something, I think there would be enough room to justify that those inherited properties would be able to be deducted from her her pocket because she paid them out of her pocket. Preferably you do not put any tax or property on your tax return that you do not own or or you’re not buying. I mean sometimes the bank helps own all those things as well but that’s that would be the the tricky part of that cost conversation. Either way, if you have a question, um again, 615-737-9986. Okay, so I was working on some taxes recently And I noticed something when I review. This is a first-time client to me. And so I want to make sure when you guys go and have your taxes prepared. It it’d be like me going to an auto shop and saying the car is not working, and then when I get there the car is working. I would not understand, to be quite honest, I wouldn’t know what they did to really make the call work. They might tell me, but I wouldn’t know. So that’s sometimes how taxes are for some people, right? So you go in, you hand them the the documents, the tax returns done, and you just assume That’s what you just paid for that this person knows their taxes. But I can say to you, take a quick look. Ask questions as Like, hey, did you get my rental property? Did you get my social security? And that they should be able to just say, yes, it’s on this line here. You can see the schedule. You know, did you deduct uh my property taxes? And then they’ll say, no, you know, you didn’t qualify, or yes, here it is on the Schedule A. Feel free if if you’re feeling that you can’t ask those questions, you’re at the wrong place. These are taxes that you’re signing off on saying they are done to the best of your ability or the best of the ability you you hired someone to do. Um and what I have found is that several of these uh people doing taxes um aren’t putting things on the right lines. I mean, I have one where this person had been going to this person for three years. They have a rental property and somehow the it the income from that rental property without reporting total income and all the expenses, just the net effect was ending up under other income Um, that means the depreciation wasn’t coming through. That means there just was no paper trail, you know. I mean, just said other income. It didn’t even say rental as other income, it just unidentified other income. You know, uh same thing when I had one company where they they did a lot of personal loans and they had actual mortgages, right? And they weren’t reporting this as interest On their tax return, even though they were providing the information to the preparer that they were dealing. So I just want to make sure when you go into these, I know that you’re going to say, hey, I’m paying this. person to do their job. And yes, you are. But keep in mind that the IRS is also looking at you as the final person. Your name’s on that, your social security number, you are the final person So and and mistakes might be made. I mean between any person. I’m not, you know, no one’s perfect. But you need to at least ask. Hey, did you pick up this? Did you didn’t really ask me, but I had this And they may turn around and just say, you know, that didn’t really apply this year. That’s not part of the current tax code. You can’t deduct this. Who cares? Those are questions. Questions should be answered. You should feel comfortable with the person that you’re dealing with to ask those questions, to review that information. That’s all I’m saying. If you’re not if you’re going in someplace or you know you know you’re dropping off your tax forms, again, nothing wrong, but how long does it take to have a basic conversation and say, hey, can you confirm these information is all on here Because I want to make sure when I’m signing that this information is there for me to sign off on, you know? Um, so you have to make sure you’re the person that is asking those questions and that you’re doing it. I have another one that just came in and she wanted to know if she could write off the miles to going to her doctor. And she had heard that there’s medical miles. And the answer is yes. There are what’s called medical miles. There’s also, if you work for a charity, there are charitable miles. But keep in mind you also have to deal with the fact that you have to itemize to take either of those so right now that’s a little hard to do it’s what almost 16 000 for a single person 31 for um person underage, a married couple underage 65, I think, and like 34 if you’re over 65. So it’s that’s a lot of debt. Single people probably have the easiest because if you have a decent sized mortgage, you might be able to itemize um some of the charitable miles Medical miles, you have to have more than 7. 5% of your income. So $7,500 if you make $100,000. Anything above that would be a tax deduction. So again, it really comes down to income and how hard or easy it will be for you to be able to meet those criteria when you’re doing it. But Always turn that information in because you never know if it’s something that’s going to happen. All right, let’s hit Steve. See what I can do with Steve. Hey Steve, what’s happening?

Yes ma’am, thank you for taking my call. I wanna ask the question about the big beautiful bill and the addition to the standard deduction

Yes sir.

Uh over sixty-five, right?

Yes, sir.

But it only adds to your standard deductions, correct?

No So if you itemize or take a standard deduction, you still qualify if your income limit is within it for the six thousand dollars per person and this is only for as Steve was saying for people that are age 65 and older this doesn’t have anything to do with itemization It’s actually two lines below that.

You’re not gonna I guess I’m trying to ask, you’re not gonna wind up with that money, right

You’re not gonna I mean it’s a deduction, so you’re not gonna get a refund of six thousand dollars. It will reduce your income by six thousand dollars.

Yes, ma’am, that’s exactly what I thought. I just want to make sure about that.

I like that, yes. I had two people call this week at the office and that’s the first thing. I don’t I don’t need to file, but I want to file so I can get the six thousand dollars. So there’s obviously a lot of misconception. So thank you, Steve, for calling

There is must dis uh uh must yeah. Yeah.

Hey thanks for calling. And uh it yeah. And to reiterate really quickly what Steve and I were talking about for people that might be listening is um simply you can hang up on Steve uh is that the one big beautiful bill one way for them to help people over sixty five pay tax on social security now some people at sixty five are not taking social Social Security yet. But the theory is, is that the majority will be on or soon to take Social Security is to be able to give them a deduction of $6,000. So if you’re in the 20% tax bracket, that could save you. about twelve hundred dollars in taxes. But this is only if you owe taxes. I had two people this last week week they called they’re very confused because they wanted to go ahead and file taxes even though they haven’t had to file for years because all they had was social security And so Social Security itself is not taxable, therefore they have a zero tax return, but they wanted to get the refund of that money. That money is not refundable. Zero percentage of it is refundable. It’s only good for individuals that actually have to pay taxes. And it would help reduce your tax bill. And it does work. I have a number of people that if their income, especially in retirement, are often the Really close, you know, 75,000 this year that’s 76. Maybe they made a little bit more in interest. So their tax bill is fairly consistent, and we’re seeing a thousand dollars, a two thousand dollar drop because of being well in the one with there’s two thousand there’s two of them so it was a twelve thousand dollar deduction but still that was helping did it cover all the tax that was on social security Security? No. But was it a nice, wonderful surprise? Absolutely. It is a wonderful thing. And most of my clients are just happy that they don’t have to pay as much as they usually do. So, you know, anytime you can save a few dollars, it is a win-win situation. But it’s not everybody’s not going to get it. If you’re a single person and you make $85,000, you’re not going to qualify for all six you might get $4,500, whatever. It’s going to means test out is what I call it. So $75,000 or less as a single person, you will get all $6,000. 150,000 or less, you will get 12 if you’re married, 12,000. And but if you make any more than that, they will slowly zero itself out. So just, you know, put that out there. But again, it is not a refundable, it is not going to be putting more money in your pocket. It is all going to be a way of reducing taxes. Period. Reducing taxes. Okay. Hopefully that helps. Uh, because it’s very frustrating when you think you’re not getting enough money, or if you think, oh my gosh, I’m gonna file because I want to get some more money, and then you find out it’s not refundable, then you get a bit upset So if you’ve got questions, you can join the show. We’re going to take our second break here, but he can at 615-737-9986 We’re taking your calls, talking about taxes, talking about IRS issues. Maybe you haven’t filed for a period of time. Maybe you’re looking at something on your tax return and you’re sitting there going oh my gosh why do I owe so much money usually I’ve had those calls and people are like you need to do my taxes because I did them myself and I owe all this money and I want you to file them keep in mind I’m not doing anything different than you would be doing unless you’re not sure how to do your taxes. If you’re not answering the questions properly, you’re not putting the forms in properly. Sure. Sometimes my number might be higher than what you have. Sometimes it’s lower. I had a nice one this other day. She was just doing an estimator that they have on the IRS website. and the said that she was going to owe like $8,000 and she only owed $800. So um it was a wonderful thing. But that was an estimator and probably didn’t have all the information that I did when I prepared the actual test tax return, but it made her happy anyways. All right, we’re gonna take a quick break. We’ll be right back with the Dr. Friday show. Alrighty, we are back here live in studio. I’m Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. So if you have a question concerning taxation had someone that wanted to know his wife was uh working as a travel agent and wanted to know if he uh if if the trips they were taking would be able to be qualified as a tax deduction. And that’s an interesting question actually because I have a couple people that are part of a um travel club, I would like to refer to it. And the idea is you get people to help sell products and people to use it for their vacations and they do things on the side. Um but it’s not really any of them they don’t do as a full-time job. First, if you’re truly a travel agent, you need to be making sure that this is a full-time position, not just something you do on the side because you get some good discounts and you like to travel. And then I think you would have to be able to really document how many trips you have sold on those kinds of trips so that you can show that your experience of having this travel has made the trips a viable tax deduction. So let’s say you’re uh take a cruise on the Royal Caribbean and you you’re doing different ports of call, but you’ve never booked one of them of those you’ve never actually sold this package to somebody else um and you know and you’ve taken two or three or four different but yet you’ve never even booked booked a cruise or booked only one or two cruises yet you spent more in travel than you have in actually bookings. The IRS is not going to look at that as a necessary um tool. Now if you’re selling, you know, 50, 60, I don’t know what they call them, rooms on a cruise, every cruise, and you take a accrues. I’m assuming that would be necessary because you’re now selling something that you have a better uh knowledge on and that’s creating sales. Therefore it’s a necessary um part of your job. So again, it really does come down to um how much what how how necessary of that trip would be what did you walk away with what can that turn into dollars because the irs is not like your vacation has nothing to do with doing this kind of situation. It all has to do with how and what you’re going to generate in sales and how was that tied to whatever you did I know I had a client also walk in the office this the other day and said, well, you know, why can’t we, they have like four rental properties. Why can’t we buy ourselves a Mercedes and use that as a car for the rentals? Um and they they manage them themselves. So theoretically there is a management But how is the Mercedes a necessary expense to managing rental properties? It’s a lot like a guy that owns a hotel that goes buys a beautiful BMW um and they write the BMW off. How is how is that necessary to the hotel business? Now, if that person had to have a vehicle, and then keep in mind there are luxury deductions, so theoretically the IRS is saying A car maybe necessary because he owns five hotels and he has to drive it between them all. It’s a necessary expense. But is it a necessary expense to go and buy $175,000 Mercedes or whatever. There is rules. I know people will turn around all the time and they’ll say to me, Well, I brought over a six thousand pound car and I should be able to take a section 179, which right now, again, we were not at 100. But thank goodness for the one big beautiful bill, we’re back at 100%. So I want to take that $175,000 vehicle off as a necessary vehicle for my business. And again, what is your business? Why would you? I mean, it has been approved in court. Um, a couple of the real estate people have been able to prove because they have sold multi-million million dollar homes, their their relationship to that kind of um sale is vital for them to prove their success and people like to see that therefore they’ll use them that has been proven but it’s also been proven that somebody that owns as I used it earlier a hotel or a handful of rental properties. I don’t care if you own a hundred rental properties and you’re managing all of them, it would still be what’s the necessity of having a high-end vehicle? Especially if all of those rentals are in normal, ordinary neighborhoods. It’s not like you’re in the million-dollar club and you have to go in and out of um very nice subdivisions with multi-million dollars and your vehicle would be um something that might not uh sell something or be a part of but keep in mind What you drive, the IRS basically says it’s four tires, right? They don’t care that you have it. So you need to prove the necessity, especially if you’re not just using miles Miles you can justify, right? Because hey, if I have four rentals and I need to go to my rentals, I can go from my home. to the first rental and then f and I don’t have to show that as commuting in a rental situation because I drove out there specifically for a reason to go to that one and then if I had to go to Home Depot go back to that repair something and then come home. That is a legitimate tax deduction. I did something. Maybe I collected rent. Maybe I need to look at something to get a repair person out there. Those are, that’s my job as a manager of my own rental properties. That is allowed. And saving the receipt, making sure you document that receipt because the problem is Home Depot lowells. Um, if you order something online to replace something They need to know that that was for said rental, not for your personal home. And that’s not easy to prove unless you can show this is what the process was and and how you how you had to replace the light bulbs or the air filters or whatever it was. And and you know it’s it’s up to us as the taxpayer to document what we’re doing so we can do that. And while we’re on that subject and rentals, let’s also not forget that our lawn person our heating and air conditioning guys, our repair people, anything from roofing, unless they’re a corporation, which most businesses nowadays are LLCs, we need to 1099 them because rental properties are businesses. If someone does it at your own house, your own personal lawn guy. It’s not a business. Theoretically we’re not, I’m sure the IRS would love it, but theoretically we’re not responsible for 1099 them. But if we have a property that we’re renting out, that now makes it a business, that now makes it something that you have to 1099 those people. There are penalties up to $500 for each penal 1099 you do not issue. There is stuff that you need to to deal with is all I’m saying. So don’t just think that this is all easy. I know some of my people sometimes um I think get a little relaxed with it. And um You know, as long as the IRS isn’t looking, that sounds great. But if the IRS is looking, not so great, because then they disallow it. Now you’ve got profits that you didn’t have before, and that never makes anybody happy Let’s just be honest. It never does. It doesn’t make any of us happy. So if you want to join the show, you can. It’s 615-737-9986-615-737 9986 just saw an email about doing a 1031 exchange. I am an avid believer in 1031 exchanges as long as the profits on those justify the purpose. So meaning that if you have a property that you have $10,000 in because you’ve owned it for 40 years and now it’s worth um a hundred thousand dollars and that ninety thousand because of your income could be taxed at twenty-three percent, that might be a good time to consider what they call a ten thirty-one like kind exchange. Sometimes it’s It’s you know whatever the dollar, but if it’s only like a ten or fifteen thousand dollar difference, I’m not an avid believer, why not pay now and then not have to worry about it? But most people look at ten thirty-one exchanges, you’re talking at hundreds of thousands or even millions of dollars. And keep in mind, whatever you sell that property for, you now have to buy property for And so um it, you know, it is what it is. So you have to turn around and and make sure you do that. So if you have um you know, sold something for a million dollars and even though you may have had a mortgage for six hundred thousand on it, you still have to go buy another property for a million dollars to get it um out of you know to to qualify for a 1031 exchange it’s not based on your profit it’s based on the gross sale and you can always deal with someone on that question all right let’s hit Danny in Nashville see if I can help him out Hey Danny, thanks for calling.

Hi Doctor How are you? Thank you so much. Um the reason I w I have a capital gains question, I heard the first caller call about capital gains

Mm-hmm.

And uh we have a similar situation with my mother and father in law. They are elderly. Uh they bought a piece of property uh for Uh well I can give you the numbers for twenty thousand and they sold it for fifty thousand. Uh is but uh with them being seniors, does that matter? Uh do they get some kind of special consideration because of that

No, the only only kind of consideration anyone gets and age has no bearing would be if it was their primary home. But otherwise.

It was not their primary home. Yeah.

Yeah. Then they’re looking now again, there is a zero percent capital gains rate for long-term, I mean short term is ordinary income, but if it’s been held for over a year, and if their income is a married couple including the capital gains of in this scenario, let’s say thirty thousand dollars is all under a hundred thousand, they may still pay zero tax.

Okay.

Yeah, well so I don’t know their situation, but I’m just saying sometimes we get lucky on that element. But other than that, uh Um yeah, they’ll they’ll have to pay capital gains on the difference.

Yeah, well I don’t think they’ll even come close to that.

So that may be their saving grace. Exactly. I I’ve had it happen more than once, my friend. It’s always a nice little gift that keeps on giving.

Yeah, well I I certainly appreciate it. I listen to you often and I have met you a couple of times when you’ve helped me out with a couple of things. So I appreciate it. Thank you so much.

Thanks for calling Danny. I appreciate it very much. All right. You can uh Thanks, Danny. All right. If you want to join the show, we’re getting ready to take our last break, but you can join the show at 615-737-9986-615-737-9986. taking your call, talking about taxes, talking about maybe like this situation where you know somebody else that has maybe a tax question and not everyone’s um brave enough to call a radio show. So it takes a little bit of guts to do it. So if you have a question for someone else or a question you might think other people might be thinking about and you want to have An answer to it, feel free to give us a call again at 615-737-9986-615 737-9986. Again, I’m Dr. Friday. This is an I am an enrolled agent licensed by the Internal Revenue Service to do taxes. and representation. So if you’ve got questions dealing with that or maybe you just know someone that hasn’t filed taxes in a while and you need some help, we’ll be more than glad to help you out or leave lead you in the right direction to help you make sure that whatever you’re doing now, you can make sure it’s not going to cause problem later because the last thing you really want is Uncle Sam. to be a person that is going to be on your back all the time. All right, we’ll be right back with the Dr. Friday show. We are back here in studio. Let’s uh looks like we got a few people. Let’s go to Sue and Smyrna first.

Hello. Hi. I’m a senior citizen and um because of the Fairness Act I got a lump sum last year. Mm-hmm. And uh I had to pay eight hundred dollars taxes on it. But so I went in and I uh put down that I’d take out seven percent you know, for next year taxes or whatever. Are they gonna is has President Trump done the no tax on social security or should I just keep that seven percent or should I raise it

Well, I mean, at least keep the seven. The no tax on Social Security is is basically his way of the six thousand dollar that he gave you because you’re over the age of sixty-five, that’s how he’s helping with the tax You’re under sixty-five, then uh you won’t get it yet.

Yeah, I’m over sixty-five. Okay. Yeah, I got it this this year and that did help, but Yep

Sorry. Yep, but good question.

Oh yeah, I was thinking it wouldn’t tax it at all.

But we were all hoping, but that is not gonna probably pass uh to be quite honest. Just not gonna happen too many people of over sixty-five that help pay the tax bill.

Okay. Do you think seven percent will be good?

If that I mean if you again it really does depend on how much, but you sound like you were pretty close this year, so it sounds like the seven percent should be pretty close, but um you know it’s too hard to say on the radio unfortunately.

Right, right. Well yeah well I’ll just keep that I if I have to pay I have to pay. But yeah thank you for your help. I appreciate it.

Thank you Uh-huh. Let’s do Susan and Dixon. Goodbye. Susan? Uh how are you? I’m good

Quick question for you. Um I wasn’t I was wondering if someone’s lived in their primary residence for say twenty to thirty years and then they sell it, are there any tax benefit credits for I mean are Anything that saves you other than paying is a big difference?

Right. So the only advantage, I mean, anyone that lives in it five years or more has the two out of five year sale and it’s two hundred and fifty thousand per person, so A single person would get 250,000 exclusion and a married couple would get 500. Um that exclusion plus whatever you paid for it. So So let’s say you paid 200, you get 250, you could sell it for 450,000 and pay zero tax. Okay, good. Yeah, okay. Good. Thank you. Thanks very much. Uh-huh. How about Bob in Columbia?

Hi Dr. Freddie. My question is very quick. Uh Sure. Is that considered income to me as the homeowner?

No, thank goodness Yes. But no, that’s just all between family.

Okay. All right. That’s all an easy one.

That is an easy one. Thanks, Bob.

Yeah. Thank you.

All right. And that actually th that is a a good question. I have had that more than once. Because even when you have a rental and a lot of times people will let their children rent, there’s certain things like we can’t take losses on those kind of rent. rentals. It’s a little different when it’s family, family works together, achieves whatever they’re going to go after and do what they need to do. But other than that, you don’t have to worry. That’s just, you know You can give a gift to each person of eighteen thousand dollars or nineteen, I think it is now, uh, per a year. So all of that kind of washes out those kind of situations. It’s not a tax deduction for the child either. So um you know, that works out for for anyone. But those were great questions. I did want to say um if if you are a person sounds like um Uh Sue initially she was asking about um the tax on her social security. She’s actually thinking, because a lot of people do not take the choice to have taxes withheld on Social Security. But that can be a problem because I have people now that are getting, you know, $50, $50,000 a year in Social Security, up to 85% of that can be taxed. You’ve got $40,000 that doesn’t have any withholding. That’s going to eat up your entire pretty much 12% tax bracket if you’re single. So it is an important thing to think a little bit more about if you’re getting Social Security on top of a pension, on top of your RMD or your IR, um your IRA distributions, um, or maybe you still have a job and you you’re receiving your your social security, you know, you need to make sure you are thinking about the taxes that happen on social security because so often, you know, this the $6,000 per person um helps. It does save a few dollars, but it’s not going to pay your social security. Bill, most likely. At least we we did some uh calculating in our office this last week and did it with and without the six thousand and and how much the tax was on the Social Security based on their income brackets and it’s it’s not going to help that much but it does help it’s better than nothing so it’s better to put that 500 1000 1200 whatever it might have been that saved you versus what you would have had last year rolling into the this year. So um take the win for what it is, and most of us do, but it’s uh I I have not yet seen anything from Donald Trump other than what happened on the one big beautiful bill. He still talks about not wanting to pay tax on Social Security. I just not seeing anything that’s going through the Senate or the House that shows that that’s actually going to be be um a viable um concept but we can hope don’t think we should pay tax twice on anything and social security is definitely being double taxed when you are retired. So if you have a question or you need to have um you know some some sort of situation and uh you can always email us at friday at drfriday. com. I will tell you this time of the year Um our staff is doing their best to communicate, try to get back with you, try to update you on what you have. Um they will try to uh at least send you in the right direction if it’s a question that we can help you with but um this is our busiest season so a lot of times that’s also when you’re thinking about what’s going on in your taxes while I try to push throughout the year to be thinking about these things we do a lot of times in in um our tax meetings that we also prep for 2026. What what do we think is gonna happen? I might retire, I might sell a house, what would happen to my Irma if I sell a house? How long do I have to pay the higher uh Medicare tax? Cause a lot of people Um let’s say you you own a rental property and you sell it and you make a couple hundred thousand or you know whatever and now you’ve got the taxes, but you also will have if you’re receiving Medicare, you also have IRMA that’s going to be a problem. And how can you, if you can, avoid that kind of situation? And You know, to be quite honest, it’s not an easy thing to avoid. Yes, you can do 1031s, but then you really haven’t sold your real estate. You’ve really just changed one type of real estate for another um and that doesn’t make an easy transition so there are there are some reads and different things out there that is a possibility for you to be able to sell and do something with but um i’m not a financial planner let me put that out there i do taxes only taxes so if you’re looking for financial um advice financial planning advice you need to make Make sure you call someone that is an expert in that division. I am not that person. I am a tax person. So I can tell you what is going to be the best um option through the eyes of someone that’s looking to save taxes. But keep in mind, my my vision is usually one to five years. I’m not looking at retirement for you. I don’t know what you have coming down the line unless you’ve shared it. And then we might say, well, you know, hey, it’s a good time. Be honest with you, we have a number of people that are now over the age of 65 and we have that extra twelve hundred or twelve thousand dollar deduction And so we’re doing some small IRA conversions at zero or 12%, keeping them in that lower rate to make things happen. All right, we’ll see if we can get John on and off. Hey, John, what can I do for you?

Uh yes ma’am, I bought uh bought a property years uh years ago. It was a trailer in five acres.

Mm-hmm.

Lived in it, paid it off, sold it. So I rented it, decided to sell it and I just sold it th last year The bank said something by a gift equity tax because I’ve kinda sold it cheap ’cause it’s kinda rough shape. I made twenty five thousand off of it actually. Do I have to pay taxes?

Well I guess uh how long how long did you rent it?

Okay. Yeah.

So yes, so the difference between what you paid for it Um and what you sold it for, that would be taxed at capital gains. And then also since you had it as a rental property, you probably depreciated that trailer or you legally should have depreciated that trailer for those five years And so then you have to recapture depreciation, which is taxed at ordinary rates. Reason I don’t like depreciation. But we don’t have an option. That’s tax law. So just put it out there, but you would have both of those.

Well see the bank, of course the county appraised it for one fifteen. And that’s the reason that their gift equity tax was their down payment

Right. But you purchased it for how much?

Yeah.

Oh fifty. Okay. So the difference between the fifty and the one fifteen theoretically would be your capital gains Plus wouldn’t wouldn’t be much of a recapture. Now you may have done improvements on the trailer or something while you live there, so that’d be something you’ll have to look at. Unfortunately, we’re hitting the end of the clock here, John, but you might want to see if you did any major improvements that would have helped value the land for reason it’s sold for more. If you didn’t, then yeah, you’re just looking at some decent capital gains Sorry. Okay. Thank you, sir. All right. We’re at the end of the show here. If you want to join us or have a question or whatever, you can email Friday at Drfriday. com. Again, that’s Friday at drfriday. com. You can call us on Monday morning at 615 367-0819-615-367-0819. Hope you have an awesome Saturday. Love the show. Cop you later.