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Posts Tagged ‘Taxes’

Estate Tax Planning 2009

Question: Real Estate Tax advice.. very detailed ..any experts in real estate tax out there?

We are selling our principal residence in South Carolina which we will have lived in and owned for about 18 months (thus short of the 2 year mandatory minimum for tax free status).

We will have tens of thousands of dollars in capital improvements (new hardwood flooring, counters, siding, deck, extensive bathroom renovation..done in 2009). We also have lots of money in repairs and painting, cleaning, yard maintenance etc.

We will hopefully sell in spring 2010.

1. We plan to make about 80k over what we bought it for.. can we deduct any of what we spent fixing it up?
2. Will we get taxed on every dollar over what we originally paid in 2008? There are no extenuating circumstances to force the move.
3. Can we deduct our closing costs from originally purchasing it?
4. Is there anything else you can tell me that might help..ie. things I CAN deduct to help me avoid some of the profit tax?

Thanks and Happy New Year!

K

Answer: 1. We plan to make about 80k over what we bought it for.. can we deduct any of what we spent fixing it up?

Add the costs of improvements, but not maintenance and repairs, to the purchase price of the house. Also, add the real estate commission you pay to sell the house to the purchase price of the house. The total of these amounts is included in the "basis" of the house (see also 3 for other additions to the basis). Only the difference between the selling price and the basis of the house is subject to income tax.

2. Will we get taxed on every dollar over what we originally paid in 2008? There are no extenuating circumstances to force the move.

No. You may be subject to tax only on the difference between the selling price and the basis of the house. Since you have owned the house for 18 months, your gain is long-term capital gain and is going to be taxed at a maximum of 15%.

3. Can we deduct our closing costs from originally purchasing it?

You can add the cost of the survey, deed recording fee, title insurance, and other expenses which are related to the purchase of the property to your basis. You cannot add any fees related to the mortgage, such as the mortgage origination fee.

4. Is there anything else you can tell me that might help..ie. things I CAN deduct to help me avoid some of the profit tax?

In the year of sale, if you have not deducted all of the points (also known as origination fees), you may deduct them on Schedule A.

Best advice is to seek out an experienced professional who can go into the details as mentioned above. It will be money well spent and can save you a lot in taxes.

Business Valuations for Gift and Estate Tax Planning: What Financial Planning Professionals Need ...

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Donations Tax Deduction Clothing

Making a charitable donation is a noble act. Charity need not be just with money. It can also be done by donating objects like clothes, furniture, cars and just anything. Cars are donated to the recipients directly or they are sold and the money is given away as charity. Many people prefer to donate used cars for helping the community.

There are many charitable organizations that accept cars as a donation. These cars need not be in running conditions to be donated. The cars are generally sold or auctioned and the proceeds are used for charity work. There are some organizations that accept car donations, sell the cars and give the proceeds to other charitable organizations.

Donating a car is a noble gesture. It is also a good tool for reducing tax payments. Car donation to an approved 501(C)3 charity organization is tax deductible under certain clauses. These are applicable for all kinds of cars. You can claim the car’s fair market value if the car is worth less than $500 or it is in good working condition. You can claim deduction equal to the actual sale price of the car is the car is worth more than $500. However, before donating, ensure that the donation program is a qualified, 501(c)3 IRS registered charity since only such programs are eligible for tax deductions. Information about such charity programs can be obtained from the IRS website or in the Publication 78 that is available at most public libraries. If the total donation is more than $500, then a separate form (8283) has to be filled. Donating a car for tax purposes requires itemized deductions on the personal tax return.

Determine the value of the car meant for donation. This can be done by checking the blue book value. Take the condition of the car into consideration while determining its value. Most charity organizations take donated cars for free, but there are some which charge certain fees. Make sure you have the title for the car.

Most charity organizations that accept car donations also provide other services like free vehicle pick-up, easier/hassle-free paperwork and easy online application forms. The donations can also be made to your preferred charities. These days, making a charity car donation has become very easy with online application forms and faster processing. The whole process takes just 2-3 days. Car charity organizations can be located online over the internet or they can also be found in yellow pages or through advertisements.

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Charity Car Donations provides detailed information on Charity Car Donations, Child Charity Car Donations, Catholic Charity Car Donations, Used Car Charity Donations and more.

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DaNang, Vietnam Sponsorship Program – Global Volunteer Netwo

Giving To Charity And Taxes

Question: How much can I right off when giving to charity?

Ok lets say hypothetically that I gave 50% of my gross income to a charity last year. How much can I right off and not owe taxes on?

Answer: Depending on what you're giving and who you're giving it to, the limits range from 20% to 50% of your AGI. 50% is for total contributions. See IRS Publication 17, Chapter 24 or other IRS documents.

Obviously it is only legal to deduct what you actually gave. You can be asked by the IRS to prove that you actually made the contributions you claim.

Liberals Have Really Big Balls

Year End Tax Planning Tips

Question: How can I get back on track (get healthy)?

I’ve been run down now for about 4 – 5 months. I’m a second year law student who at the end of my first year – this past May – burned out. I started working at a large firm this past summer and was extremely stressed out every day. I also started a new relationship this summer, and while wonderful in many ways, it is also very taxing on my energy reserves. I used to work out daily but I no longer do. It’s been about a year since I’ve had a consistent workout schedule and “healthish” diet. I’ve gained 20 lbs. in the past year. Can you can give me some tips on getting my health/life back on track? Also, if you have a detailed plan, could you tell how long it will be before I feel better.

Thank you so much!!

Answer: maybe if you see a nutritionist i heard that is a good idea! i know someone that did that and they lost all kinds of weight the healthy way! good luck!=)

Tax Tips: Year-End Tax Tips (ASL, Captions & Voice Over) - December 09

Tax Planning For 2009

Question: Getting married and I own a house. Does my fiancee qualify for the $8000 tax credit?

We plan on closing prior to the wedding but I will still be a co-borrower on the mortgage. I am selling my house before the wedding as well. Can she still get the credit? We will be married by the time we do 2009 taxes.

Answer: As long as you close on the sale prior to the 11/30/2009 deadline AND prior to your marriage AND your fiancee claims the credit by amending her 2008 return she will be able to claim the entire $8,000 credit.

You will NOT be able to claim it on your 2009 return since you will be married by then. When the buyers are married to each other, BOTH spouses must qualify for the credit.

The financing details are irrelevant to the issue of eligibility for the credit in this case.

Edit: From the TD ratings it's pretty obvious that there are plenty of clueless folks lurking in the background. When 2 unmarried persons purchase a home they can split the credit any way that they wish. If only one of them is eligible for the credit, that person may claim the ENTIRE credit on their return.

As a deviation from normal policy the $8k credit for purchases in 2009 CAN be claimed on the taxpayer's 2008 return as long as they close on the purchase BEFORE claiming the credit. If they have already filed their 2008 return they can amend by filing Form 1040-X and attaching Form 5405.

Edit 2: For your benefit and that of the mullet heads who seem to think that this is a bad answer, please see the following link: http://www.irs.gov/pub/irs-irbs/irb09-06.pdf Scroll down to page 446 (it's about half way down) and it will explain it all to you in excruciating detail. This is an IRS bulletin that proves that this is a CORRECT answer.

Luscombe: Year-end Tax Planning for 2009