My Wife Wants To Keep Living Together After the Divorce (Hour 2)
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How can I handle tax implications after a loved one's death?
from the headquarters of Ramsey Solutions. It's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. We help people build wealth, do work that they really love, and create actual amazing relationships. Rachel Cruz, Ramsey Personality, number one best-selling author, is my co-host here on the air, my daughter as well. The phone number is 888-825-5225. Starting this hour off is Dana in California. Hi, Dana, how are you?
Hi, thank you for taking my call. I'm doing well. How are you?
What should I know about owner financing when buying a house?
Better than I deserve. What's up?
Well, um, my husband passed away a little over a year ago and I know that you, yeah. Um, I know that you advise people not to make big decisions for about six months, but I have, um, a nine year old daughter and he passed away in the home. So we sold the home. Um, and I took, um, one of the distribution, I took a distribution from one of his accounts to pay off our debt and put towards the down payment on the home that we purchased. we relocated. Um, anyway, now I have a tax burden of $33,000 because I used, I didn't, because I took the distribution from that account. And I'm just wondering if there's some loophole or something that my tax person is missing, perhaps, you know, because it's, it went from one investment to the home, which is technically another investment.
So
How can I start a business with a baby on the way?
Just wondering. I was out of debt for a hot second, and now this. I'm sorry, Dana.
I'm sorry. How old was he?
He was 36.
My goodness. Okay. What other monies do you have?
I have my monthly income.
What are the details involved in obtaining a construction loan?
What do you make? I'll make a little over $90,000 this year.
Okay, good.
So I'll be able to, I mean, I will be able to pay it off. I've already run the numbers and I can pay it off in about a year, but it's putting me, I wanted to have the home paid off and just, it's just slowing things down.
Do you have any other money? You say you took a distribution from this particular fund. What's left in it?
There is another fund, but it's, I can't do anything with it right now because it's because of the way that he passed away. There's,
How do I navigate living with a cheating spouse during a divorce?
There was no life insurance, but this other retirement account is basically at a standstill. I have it. I mean, it'll be fine, but it's just pending like a workers' comp situation.
Okay. All right. And how much does it amount to?
That one is $168,000. Okay.
When will that situation be settled, do you think?
I'm hoping by June of next year.
What are the emotional impacts of divorce on family dynamics?
Okay. When is the tax bill due? Next April? Or is it already due?
It's due now.
It was due last April. It's late.
Okay. Yes, it's late. I filed an extension, but still.
How can I maintain financial stability while going through a divorce?
Extensions don't extend payment due.
Correct, yes.
They only extend the filing. So it was due in April. Okay. And the money, the retirement account you took it out of, how much is left in it?
It was $108,000, so I took the entire account and put it towards my house.
Okay, so you don't have any money left except the retirement that's in dispute.
Yes, right. I have about $20,000 in other retirement funds.
What advice is there for co-parenting after separation?
I have my retirement fund that's $10,000, and then I have another.
Do you have any money in just savings?
I have my $1,000 emergency fund. How much? $1,000. Oh, okay.
All right. Okay. Okay. Okay, the answer to your question is no, there's nothing you can do. You got bad advice and the moves that you made have pinched you into a corner because your house is not an investment that is transferable from a retirement account. Both are technically, you know, qualify under the term investment, but for tax purposes, they're not even close to being the same thing. So, no, you're going to pay $33,000 because you made a bad move.
Yeah.
So what I would do is this, is you owe, you have a debt of $33,000. The debt is with the IRS at a high interest rate and high penalties.
Okay.
Okay.
Yes.
So turning it into a different kind of debt is not taking out debt. It's just changing the type of debt it is. So if you can go down to your credit union making $90,000 and borrow $33,000 and pay it off, that'd be the thing to do.
Okay. I was wondering about that.
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Chapters
8 chapters
1
How can I handle tax implications after a loved one's death?
0:28–1:06
2
What should I know about owner financing when buying a house?
1:06–2:04
3
How can I start a business with a baby on the way?
2:04–2:25
4
What are the details involved in obtaining a construction loan?
2:25–3:02
5
How do I navigate living with a cheating spouse during a divorce?
3:02–3:33
6
What are the emotional impacts of divorce on family dynamics?
3:33–3:49
7
How can I maintain financial stability while going through a divorce?
3:49–4:21
8
What advice is there for co-parenting after separation?
4:21–40:53