Huge tax bill -- I think I'm screwed
2009 was a difficult year. I lost my job in April, 2009 -- still unemployed, but waiting for an offer from HR.
Anyway, I lost my job -- wife's cancer is now stage 4 and she is no longer a candidate for surgery or radiation therapy. In September, 09 decided to sell our primary residence. Had a signed contract and I purchased a villa down the street that was going through foreclosure. Borrowed the funds from my retirement account with the plan to repay after our home we were selling closed. Buyers with signed contract walked away from purchasing our home. Tried to find other seller, but that didn't happen. Ended up renting, instead of selling the home. Tried getting a mortgage, even a second mortgage, but due to my unemployment that didn't happen. I was willing to put 5 years P&I, taxes into escrow -- banks acted as if I had the H1N1.
You know the rest, I'm getting hit with a huge tax bill to the tune of $80,000. Due to my wife disability -- I don't have to pay the 10% penalty. The rental income is covering the previous home.
We are trying to sell our condo in Florida -- I know, bad time to be doing this, but the HOA fees have more than doubled since Charlie. We bought this condo 6 years ago as an investment -- and it hasn't. I don't see real estate in SW Florida having a significant recovery for 5-10 years. So, I'll cut my losses.
I've already recovered a large chunk of the $80K in the foreclosed property. Since I've been out of work most of the reserves are dwindling -- so I don't have the funds to write Uncle Sam a check for the entire amount.
Once I get a job, I plan to get a HELOC and pay the tax bill -- It's the penalties I'm worried about. What the truth about these companies that work with the government to pay a overdue tax bill for a significantly reduced amount.