It could be several things. Metal conduit serves as the equipment ground, so there wouldn't be a separate grounding conductor but that presumes that the metal conduit goes all the way back to the service panel and isn't just for physical protection. Is the rest of the house wired with metal conduit or can you see the metal conduit at the service panel?

• A multi-wire branch circuit, the two hots (red and black) share the neutral. There are some rules for a MWBC that must be followed.

• A 120/240 volt circuit that would most commonly be used for household appliances like ranges and dryers.

• An improperly wired 240v circuit. There's a fair number of amateur electricians who believe that a 240v circuit requires a neutral and wire it incorrectly.

Are the wires just hanging in space as shown in the picture? Have you figured out which breakers control that circuit and what do things look like at the panel?

The wires are just hanging and are on the same circuit as the upstairs bedroom. There is only one outlet in the garage, which is why I thought the previous homeowner may have been trying to add another one. It is the place in the house wired with conduit and does not go all the way back to the panel. It just goes into the wall as shown and goes upstairs

The wires are live and just hanging there?!?

Do you know where the other end of the wires are?

Can you take the little panel off the corner piece near the ceiling and see if the conduit continues into the wall? If they are just individual wires (ie. not a cable) and they aren't in conduit the full way then there is a big problem here.

Also, you state that they are on the same circuit as the upstairs bedroom. If that's the case, then I assume this isn't a 240v circuit. Why would there be a red and a black?

Do you have a voltage meter? What are the readings from black to white, black to red, red to white?

The wires are hanging there bcuz the previous homeowner had something connected and removed it when they moved (I don't know what and they are not returning calls) The conduit does not continue into the wall. I didn't know where the wires go, but I have figured out that it is on the upstairs circuit, so maybe it is daisy chained from one of the upstairs outlets.

Also it is not 240v

Wire nuts are NOT an appropriate termination for exposed wiring. If the termination isn't in a box, the cable needs to be permanently disconnected.
I always liked a trick I learned from watching Mike Holmes. They always twist together the conductors of any "abandoned" wiring. That way if some idiot decides to reconnect one end or another, they'll figure it out pretty quickly.

My guess would be 14/3 NM with the red as traveler by someone with a poor grasp of 3-way switching. Is it high enough off the ground to have supplied a light?

Or they just bought the wrong wire for what they needed and used it. Big fail leaving that live. And the way the wires exit the conduit is wrong as well. Conduit should terminate to a box where they can install an outlet or hardwire something.