Slate Pay Dirt: Lillian's Money Advice Column

Guess what? I’m now part of a team of writers writing weekly for Slate’s Pay Dirt, a money and relationship advice column. My column will come out on Mondays.

Here’s the first (of 4) questions from this week.

Dear Pay Dirt,

I know, technically, monetary gifts that exceed $15,000 are supposed to be reported to the IRS. But how is this monitored? I recently bought a house with my wife, but like most people in my generation, we couldn’t afford it on our own. My parents provided a substantive gift through our lender to make up a good chunk of the down payment we couldn’t cover (maybe we will be able to pay my parents back in the long run). I have no idea if this is supposed to be reported, but my parents talked to their financial advisor and seemed to think we are in the clear.

Separately, my grandma wants to gift me $30,000 to help with remodeling our house. I’m not sure if we should split the money out over two years to avoid exceeding the $15,000 or if it’s OK to accept all at once. Finally, to help cover our mortgage, my wife and I rented out a room in our house for about $1,000 a month. But my parents have been adamant we should not report all of this on our taxes and that to do so would be ridiculous.

Altogether, these three things make me nervous we’re suddenly tax dodging jerks. I don’t want to be like some billionaire avoiding paying their share to society. At the same time, we definitely aren’t billionaires. I have a good salary, but my wife makes less than half what I do. We want to start a family soon and this money is so helpful. This is a privileged problem to have, and not exactly a case of a server not reporting cash tips. All in all, is this something we could actually be discovered and penalized for? And even if not, should we report this to be ethical tax-paying citizens?

—Not Poor But Not Rich

Read my answer on Slate

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Nice work!!

Bankruptcy or Bust made me sweat :worried: That is not a fun place to be.

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Oof, same. The Slate Plus question that will come out later this week is heartbreaking, but on a different scale (Someone who qualified for PSLF forgiveness based on their work, but they refinanced their loans privately 2 years ago).

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That is so exciting!!!

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Most excellent! (I was excited that I actually knew the answers to the first question! Who even am I?)

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Love this. Right up my alley!!

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Is there a way for it to like… email me the column every Monday? Is that a thing?

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Congratulations! I LOVE advice columns and have read Slate ones for years so I think this is amazing. I really love the advice you gave here!

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Yup, if you scroll down the page, you should find this

My family wants to gift me thousands of dollars but wants me to avoid paying taxes

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So exciting! I forget that Slate exists for months at a time and then go down a rabbit hole of reading all the advice columns for a bit.

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Congratulations!

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Awesome! I already enjoyed this column on Slate and now I have even more reason to read it!

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EYYYYYYYYYYYYY this is awesome.

So cool!

This week’s column, first question.

Dear Pay Dirt,

It seems to me like I bought a home at what was probably the peak of the market… Maybe even the same week it started to turn—when we didn’t realize it was turning from a seller’s to a buyer’s market. And, unfortunately, I don’t love the place (long story) and am not dying to be here for very long. The mortgage should be manageable if everything lines up but is higher than what would be truly comfortable.

What should I do, practically, to make sure it’s not a loss? And, more philosophically, how do I not obsess about the timing of this decision?

—Real Estate Ups and Downs

And this one:

Dear Pay Dirt,

I’ve recently accepted a new role that will require moving my family from the PNW to England. Our plan is to sell our home which has well over $700,000 in equity and live in a vacation rental as we get to know the new city and where we’d like to settle.

Part of what prompted this change is my growing discomfort at living on land that was stolen from our indigenous neighbors. The repercussions of colonization have been weighing heavy on my, and part of what prompted this move.

With that, I want to know if there is a way to basically offer a discount on my home to a native homebuyer, if it’s legal to offer a lower price, if I should simply make a donation to the tribe, how best I can provide some sort of reparations for the privileges I’ve had as a white person on stolen land. Any thoughts or guidance here?

—De-Colonizer in Cascadia

Read the answers here:

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Two of this week’s questions

Dear Pay Dirt,

I worked in an industry with a strict hierarchy and power dynamics that foster abuse. Everyone who sticks it out trauma bonds. You stick it out long enough to make enough money to make all the sacrifices feel “worth it.”

After time away, I am returning to a more equitable position. Before I left, I was deep in the “do whatever it takes” mindset that fuels the industry and widespread abuse within the industry. I was working on an obnoxiously stressful project. During this project, I personally paid for several invoices for my boss as well as other personal charges (I could not use their credit card for in-person transactions). The total is roughly $1,400. This is a lot of money to me, but not a lot of money to them. I don’t want to use the money for anything. I’m a saver and miss having that number beef up my now pitiful savings account, which took a BIG hit after being out of work from the health-related mishaps incurred while on the aforementioned catastrophe project.

My former boss and I are on decent terms now, after being on rocky terms. The rocky terms started, of course, when I left the project for my physical and mental health when they “needed me” the most. They still hold a grudge that I left and hope that I will one day come back. The wildness of this industry is that I often have to make ambitious personal choices that poop on my mental health. This means keeping a doggy door open to bad bosses and abusers who can actually put in the one call/email to help me get what I want long-term.

In my ex-boss’s slight defense, they were NOT aware I made these purchases directly from my account on their behalf. All of this said, do I send my ex-boss a nice email and an invoice for the personal nonsense I purchased on their behalf? Or, do I just let it go and let the $1,400 hole in my savings account fester?

—Uncle Fester

and
Dear Pay Dirt,

I’m in my late 30s, rent a stupidly affordable place in a town where rents are skyrocketing. A close family member died today and I’m likely going to inherit his house in my town. I’m one of those people who needs to focus on planning and the next steps to get through tragedy, so I hope I don’t sound callous by asking these questions.

I’m getting the house because I promised to take care of his beloved pets. I’d hoped that would be an idle promise for a long time to come, but here we are. The pets have wrecked the house. Our city condemned it after the body was removed. It was a fairly nice, middle-class home in a decent, but not fantastic part of town, probably worth around $150,000, but who knows with the current housing market. I’ll need to remove urine and feces, replace sheetrock that has been damaged by the same, replace a section of the ceiling, remove a bee hive (!), and who knows what else before the place is habitable. I have some companies coming out to do free estimates on what that would take, but I’m guessing it will be around $30,000 at a minimum.

I’m lucky to have four digits in my savings account at any given time. The mortgage would be less than my rent, and I did grow up with parents who are landlords, so I have experience renting places and the work that goes into that. My family would probably be able to help me with upfront costs, though that’s not ideal. I have so many questions: What is the equity in the home? Would home insurance cover the cost of some of the repairs? Would it be wise to ask for a personal loan from my credit union? Is this worth taking on? It seems like walking away from a property over a fraction of the value in repairs would be silly. Obviously, I’m going to take care of the critters, but I can’t bring them into my home.

As an old millennial, I’m not going to have another chance at home ownership until my parents pass away, and I’m hoping that will be a very long time from now. Should I take this on? If not, what should I do? I’m at a total loss. I’d like to get this figured out so I can mourn.

—Please Don’t Judge Me

Answers and more here:

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Ugh, I feel for these people. Hoping your excellent advice is helpful to them.