Andy and Ben owned half of a two-unit residential building. Ben lived in the uni
ID: 2720085 • Letter: A
Question
Andy and Ben owned half of a two-unit residential building. Ben lived in the unit, but Andy did not. To collect a judgment against the, Dan obtained a writ of execution directing the sheriff to seize and sell the building. State law allowed a $100,000 homestead exemption if the debtor lived in the home and $175,000 if the debtor was also disabled and "unable to engage in gainful employment. Andy argued that he could not work because of "gout and dizziness." How much of an exemption were Andy and Ben allowed? Why?
Explanation / Answer
Answer:
This is income from house property but since the property will be sold it wopuld fall under income from capital gain
Since Andy was not living there and it was let out to ben but tboth of them are owners therefore whenver there is a compulsory acquisition of property by the government or by act of law then the exemption should be consider
AS per the tax law it is cleared that the debtors can claim exemption of $1,00,000 irrepective of employment
but if he cannot go for employment and doesnt stay in the house then there wont be any exemption
But since ben wass living in the house and andy and ben both are the owners of the house it si deemend to be that both of them are staying in the house.
Therefore gout and dizziness doesnot fall under the tax law criteria henceforth the exemption woulod be allowed is $1,00,000 to both therefore $50,000 each to andy and ben.
Thank you.