Technically, the sales tax deduction lapsed after 2013. Congress for the last several years has waited until December to decide what the law is… and much of it is retroactive. So, right now there is no sales tax deduction for vehicles and other major purchases…. but probably it will be un-lapsed (that a word?)… or renewed for […]
Category: Income Tax
Is 2014 PMI tax deductible?
PMI is Private Mortgage Insurance. It is a premium paid by the homeowner to lower the risk of the mortgage holder since equity % is below their requirement (generally 20% required). So, is PMI tax deductibe in 2014? MAYBE. So many of the laws for the last couple of years have been unknown until December, and […]
1041’s and Capital Gains
If a trust has capital gains, the trust pays the tax except in the final year when the trust is closed. In any other year, if beneficiaries receive a distribution, they are taxed on any ordinary income over and above deductible expenses. If there is not a distribution, the trust pays the tax on the ordinary income. Not […]
2013 OOPS.. Mortgage not deductible
If you don’t record the mortgage, the interest is not deductible. In the case of DeFrancis, TC Summ. Op. 2013-88, while the mother-in-law had a mortgage secured by the home, the mortgage was not recorded. Since a potential buyer would not know of this mortgage, the Tax Court ruled an unrecorded mortgage is not deductible. […]
EIC Earned Income Credit – easy to calculate?
We tell clients all the time that it is complicated and hopefully they can answer the questions correctly when they use boxed software or… ready for this… try to do it by hand! The earned income credit is extremely difficult to calculate. Eligibility & computation rules take up 8 pages in the 2012 Form 1040 instructions…. plus […]
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Club dues – deduction?
Business related meals and entertainment are deductible…. You cannot, however, deduct dues (including initiation fees) for membership in any club organized for pleasure, recreation or other social purposes. […]
Can you Amend Married Filing Joint to Married Filing Separate
Everyone pretty muich knows you can take two Married Filing Separate Returns and combine them to one Married Filing Joint return. GENERALLY this has a better tax effect for the family. But, can you take Married Filing Joint and split that return into two Married Filing Separate? The answer is YES… BUT it must be […]
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Spouse & Homebuyer Credit
If a spouse had not owned a home within the past three years, could that spouse qualify as a first-time homebuyer for the credit even though the wife would not qualify? No. The purchase date determines whether a taxpayer is a first-time homebuyer. Since the wife had ownership interest in a principal residence within the prior […]
Homeless Person – I gave money – can I deduct it?
If you gave money to a homeless person or anyone needing assistance, thank you but that is not a 501(c)(3) deductible charitable organization. Nice gesture but no deduction. […]
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Reverse Mortgages – Taxable? Deductible?
Question: Are the amounts a taxpayer receives from a “reverse mortgage” taxable? Deductible? Answer: NO to both. Interest on a reverse mortgage loan added monthly to the outstanding loan balance as it accrues is neither taxable in a cash method lender’s gross income nor deductible by a cash method borrower at the time it is added. […]