If property is GIFTED, the receiver of the gift never pays a tax. The giver of the gift has to deal with gift taxes. If property with a basis (original cost plus improvements) is $200k and the property sells for $500k, there is a $300k profit and is taxable. If instead the property is INHERITED, […]
Category: Newsletter Topics
A word of caution on property transfers…..
Let’s say you gave someone $600k of property at today’s market value. It has been owned along time and only $30k is the original purchase price. We can add improvements to the original $30k say a pool, additional room,…. Add those improvements of $40k to the $30k and we have what we call BASIS of $70k. That […]
MEDICARE WENT UP …. OUCH!
There are reasons for Medicare to Increase…. Your income is higher. That’s good and we hope your income stays higher. But what if it increase because of an unusual event… can we explain that and get it lowered? Well, yes, kind of and maybe. Check this list. Even if your reason is not on this […]
2024 Social Security COLA Increase
Cost of Living Adjustment (COLA) will increase 3.2% for more than 71 million Americans. For more information go to www.ssa.gov It is a good idea to go to www.ssa.gov and make sure the earnings records are correct. When I did it, found 2 missing years. Being that I keep all tax returns I was easily able to provide […]
2023 Home Energy Credit
Credit available up to $150 for home energy audit on principal residence. Auditor must provide signed written report with significant cost-effective improvements. Must also include estimate of energy & cost savings. For the first year 2023 the auditor need not be qualified. But for the following year 2024….. Put IRS Notice 2023-59 into Google. It […]
529 Account to Pay College Debt
Up to $10k distributions from 529 accounts can be used to pay college debt… This is a LIFETIME limit, not an annual limit. 529 distributions exceeding $10k are taxable and subject to !0% penalty. […]
GEORGIA Unborn Heart Beat Detected is Dependent!
In 2022, the Georgia Department of Revenue made changes to the definition of a dependent for the purpose of tax preparation. Georgia House Bill 481 added an unborn child with a detectable heartbeat to the definition of dependent, effective 7/20/22. On Georgia individual income tax returns filed for tax year 2022 where, at any time […]
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What if I owe the IRS and Can’t Pay in Full?
Set Up an Installment Agreement. You really don’t need to hire anyone. Some general rules… If you owe Personal Income Tax of less than $10k, divide the amount by up to 36 months and offer to pay this… it is a GUARANTEED INSTALLMENT AGREEMENT. If you owe Personal Income Tax of less than $25k, divide the amount by up to 60 months and offer to pay this…. It is a STREAMLINED INSTALLMENT […]
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Can I still qualify for the $500,000 exemption if my spouse died?
A Married Filing Joint couple can sell their home and not pay tax on $500,000 of GAIN if they’s lived in the home 3 out of the last 5 years. There is no requirement to invest in a home of equal or greater value. But, if one spouse dies and the home is then sold […]
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Amending 2008 for the $8,000 First Time Homebuyer Credit
Yes, you can do that HOWEVER we are advising clients NOT to do it….. The IRS has announced that an amended return (for any reason) is taking 16 to 20 weeks to process (it is because of this $8,000 credit that the system is bogged down). Today is Nov 20, 2009. If it takes the […]
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