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I'm trying to unravel a complicated foolish mess. I'm single/55/earning $73K. I contribute 10% to 401K (unmatched contributions)/put about $1,600 to FSA/& have medical insurance taken out. I have no credit card debt/& owe about $2K on car. My '07 adjusted gross income was $63K; taxable income $54K. In Jan. '08, I obtained the title of the home thru a quit claim deed. I have been renting & living in it for 10 years. The mortgage was paid off May of 2007 by the owner, my boyfriend, who owned it since 1992, but due to work transfers, he has not lived in it for 10 years. I paid him rent until he quitclaimed it. We had an agreement that I would pay him half if I ever sold it; no real sales contract. Just after the quit claim deed was filed (State of Florida), my job transferred me 300 miles away. I need $100K for a down payment in the new location/so I put the house for sale/ & received an offer from the relo company ($275). When I reach my new destination in Aug. '08, I plan to have my 80 yr. old mother live with me, so I will be head of household. I plan to pay my boyfriend for half of the sale of the house. I will obtain a mortgage for about $200K. Now, I am trying to lower my adjusted gross income & taxable income so as to minimize the impact of capital gains. My understanding is, I will be paying 33%. I can contribute some more to my 401K by adding catch up contributions. Other than that: Is there anything I can do & any opportunities to avoid paying such high taxes this coming year???
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