'What Are You Smoking?' Dave Ramsey Blasts $130K-Income Couple After $315K Home Flip, $22K Car And 'Stupid Cars' Spiral'

A $100,000 location merchantability summation unraveled into fiscal chaos aft a mates utilized the currency connected cars alternatively of obligations.

Logan, calling from Lexington, Kentucky, contacted "The Ramsey Show" seeking clarity connected the taxation interaction of a caller location sale. He said helium and his woman bought the location for $315,000 and aboriginal sold it for $415,000.

He said the mates walked distant with astir $77,000 aft fees, but tensions roseate erstwhile $22,000 of the proceeds went toward a car for his woman portion helium inactive owed $37,500 connected his motortruck — prompting a blunt effect from idiosyncratic concern adept Dave Ramsey.

"What are you smoking?" Ramsey asked, interrupting arsenic Logan outlined however the wealth was spent.

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Logan said helium and his woman joined successful April 2022 aft paying disconnected her pupil indebtedness and starting with astir $30,000 successful savings. They rented for a twelvemonth earlier buying a 4,200-square-foot location from a household person astatine a discounted price, adjacent though they knew it stretched their budget.

With nary down outgo and a 6.25% involvement rate, Logan said they lived paycheck to paycheck successful 2024. That November, they decided to sell.

The location went nether declaration successful 7 days. After fees, they walked distant with astir $77,000 but besides carried astir $10,000 successful credit-card indebtedness from updates made to hole the location for sale.

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The speech past turned to taxes. Logan said helium did not cognize however overmuch helium owed from the sale. Ramsey replied that the nett would not suffice for superior gains attraction due to the fact that the location was not held agelong enough.

"It's mean income," Ramsey said, adding that aft income expenses and allowable improvements, the taxation measure would apt beryllium adjacent to $20,000.

He urged Logan to halt making large fiscal moves and conscionable with a taxation nonrecreational to cipher the nonstop amount.

"You went and bought different car," Ramsey said. "And you haven't adjacent settled with the IRS yet."

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As Ramsey pressed Logan connected selling vehicles, co-host John Delony joined the discussion. "You got a ticket, dude, and you blew your chemoreceptor successful it," helium said, reacting to the usage of the home-sale proceeds.