‘What Are You Smoking?’ Dave Ramsey Blasts $130K-Income Couple After $315K Home Flip, $22K Car And ‘Stupid Cars’ Spiral’
A $100,000 home sale proceeds turned into financial chaos after a couple used the money on cars instead of liabilities.
Logan is calling from Lexington, Kentucky. contacted “The Ramsey Show” attempts to clarify the tax impact of a recent home sale. He said he and his wife bought the house for $315,000 and later sold it for $415,000.
He said the couple left with about $77,000 after fees, but tensions escalated when $22,000 of the proceeds went to a car for his wife while he still owed $37,500 on his truck. Dave Ramsey.
“What are you drinking?” Ramsey asked, interrupting Logan as he explained how the money was spent.
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Logan said he and his wife got married in April 2022 after paying off his student loans and starting out with about $30,000 in savings. They rented for a year before purchasing a 4,200-square-foot home from a family friend at a discounted price, even though they knew it was stretching their budget.
With no down payment and a 6.25% interest rate, they are living paycheck to paycheck in 2024, Logan said. They decided to sell that November.
The house went under contract within seven days. They walked away with about $77,000 after fees, but they also took about $10,000 with them. credit card debt Updates made to prepare the house for sale.
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The conversation then turned to taxes. Logan said he didn’t know how much he owed from the sale. Ramsey said the profit would not qualify for capital gains treatment because the house was not held long enough.
“This is ordinary income,” Ramsey said, adding that the tax bill would likely be closer to $20,000 after selling expenses and allowable improvements.
He suggested Logan stop making big financial moves and meet with a tax professional to calculate the exact amount.
“You went and bought another car,” Ramsey said. “And you haven’t even made the deal with the IRS yet.”
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Co-host as Ramsey pressures Logan to sell a vehicle John Delony joined the discussion. Reacting to the use of proceeds from the sale of the house, he said: “You got a ticket, mate, and you blew your nose off.”
