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TaxMama's TaxQuips Mortgage Unpaid

2015-01-26 by Eva Rosenberg

ForeclosureToday TaxMama® hears from GADS in the TaxQuips Forum, with this issue that I probably should not make public: “A 2 family house has been rented for the last 5 years. Both units are rented. The owner stopped paying the mortgage 18 months ago. He still is collecting rents and reporting them on Schedule E. Since he has not paid any property taxes or mortgage interest those items cannot be deducted. The bank is starting foreclosure proceedings. T Add Mediahe question is: Can he still take depreciation?”

 

Dear GADS,

What a genius.
Or a jerk.

Yes, he must report all the income.
He may only claim expenses that he has actually paid.
Yes, he may claim the depreciation.

And…when the bank forecloses and reports the balance of the debt that has been cancelled, they will include the amount of the accrued interest in that balance.

So when you report the cancellation of debt, you will also get to deduct the interest that they have not paid, and probably also the property tax that the bank paid to protect their interest in the property – and added to the balance of the loan.

See…pure genius.

And remember, you can find answers to all kinds of questions about fiscal irresponsibility and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]

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Accidentally Late

2014-12-31 by Eva Rosenberg

missed the tax deadline
Today TaxMama® hears from JNaveen in the TaxQuips Forum, with this disturbing problem. “I regularly file my tax through TaxAct. This year I filed on time both federal and state. With lot of issues at home, I forgot to monitor whether they actually submitted or not. Looks like they didn’t submit state tax for whatever reason. I found it only today when I got mail from the MO DOR with amount I owe.”

Dear JNaveen and Friends,

I selected this question because it’s a mistake that’s easy to make. I hear about problems like this all the time. Whenever you file a tax return using an online service or a storefront-type office please follow-up to make sure your tax return is actually filed.

When you have a relationship with your own personal tax professional, you will hear from them if there’s a problem. But when you’re an online filer, or walk in off the street to chain tax outfit, we keep hearing that people do not always receive notice if their efiled return was rejected. (Either you didn’t notice the email, or missed the call from them, thinking it was a solicitation.)

One way to know for sure is, naturally, if you get your refund. But not all of us have refunds.

Seeing that your payment clears is no guarantee that the tax return was received. Payments go to a different address. When you have a balance due, it’s especially critical to make sure your tax return was properly filed. Otherwise, the late payment penalties are pretty high.

To see if a balance due return was filed, log back into your online account a week after you filed. Or drop by your chain store office to get a printout confirming your efile was accepted. It’s YOUR responsibility to make sure your tax return was filed on time. So, please, take care of yourself.

And remember, you can find answers to all kinds of questions about late filings and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]

Please post all Comments and Replies in the new TaxQuips Forum .

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Cash Donations

2014-08-19 by Eva Rosenberg

Cash donations Today TaxMama® hears from GuideForThePoor in the TaxQuips Forum, who has an interesting question. “Suppose your deductions are too low to itemize, but you still want to give money to charity. Can you give the money to a friend who does itemize – and have the friend donate it to charity and get the deduction?”

 

Dear Guide,

Sure, you are welcome to give your friend any amount of gift you like, up to $14,000 per year, without needing to file a gift tax return.

Your friend is welcome to give all, or part of it, or even more to any charity that you two select.

In fact, this is an excellent way to help charities.

I often advise people who are not in a position to itemize to give their money or household goods to someone who can use the deduction. Wise move.

Bill Porter, EA warns that once you make the gift to your friend, you have no control over that money. If they decide not to donate it, there’s nothing you can do – except not partner with that friend again.

Rita Lewis, EA suggests that if you are close to itemizing, you can use the bunching technique – making a larger donation every other year. Good thoughts from both Bill and Rita.

And remember, you can find answers to all kinds of questions about donations and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]

Please post all Comments and Replies in the new TaxQuips Forum .

 

Download the MP3 (0:00min, 2MB) or listen now...

Ask TaxMama
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Flying High on Puns

2013-07-15 by Eva Rosenberg

1) A plane was coming in for a landing at the Athens airport. As the plane flew was low over some hills , a lady asked the flight attendant: “What’s that stuff on those hills?”

“Just snow,” replied the flight attendant.

“That’s what I thought,” said the lady, “but this fellow in front of me said it was Greece.”

2) An instructor in chemical warfare asked soldiers in his class: “Anyone know the formula for water?”

“Sure. That’s easy,” said one student. It’s H, I, J, K, L, M, N, O.”

“What, what?” exclaimed the instructor in bewilderment.

“H to O,” explained the student.

3) A famous admiral and an equally famous general were fishing together when a sudden squall came up. When it died down both eminent warriors were struggling helplessly in the water.

The admiral floundered his way back to the boat and pulled himself painfully in. Then he fished out the general, using an oar.

Catching his breath, he puffed: “Please don’t say a word about this to anyone. If the Navy found I can’t swim I’d be disgraced.

“Don’t worry,” the general said. “Your secret is safe. I’d hate to have my men find out I can’t walk on water.”

Courtesy of Marilyn Kirschenbaum, who is keeping me laughing this year

Your clean humor is welcome!

Read more Money Funnies and Inspiration here:

http://taxmama.com/category/asktaxmama/money-funnies/

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The Accountant, the Tax Attorney and the Actuary

2013-04-19 by

Ask TaxMama - Money Funnies

An accountant tries horseback riding: Yesterday I had a near death experience that has changed me forever. I went horseback riding. Everything was going fine until the horse starts bouncing out of control. I tried with all my might to hang on, but was thrown off. Just when things could not possibly get worse, my foot gets caught in the stirrup. When this happened, I fell head first to the ground. My head continued to bounce harder as the horse did not stop or even slow down. Just as I was giving up hope and losing consciousness the Wal-Mart manager came and unplugged it.

~~~

An accountant, a tax attorney and an actuary were dining together at a fashionable restaurant.

“With income tax being so complicated, we accountants are all doing quite well these days,” the accountant commented. To prove it, he pulled out a $5 bill, applied a match to it and used it to light his cigar.

“With so many people engaging in tax avoidance and the IRS auditing more wealthy taxpayers , we lawyers are also doing very well these days,” the lawyer mused. To prove his point, he got out a $100 bill, applied a match to it and used it to light his cigar.

“With the new Affordable Care Act, we actuaries are doing even better,” the actuary said. To prove it, he wrote out a check for $1 million, applied a match to it and used it to light his cigar.

~~~

The doorbell, rings, and a man answers it. Here stands this plain but well-dressed kid, saying, “Trick or Treat!” The man asks the kids what he is dressed up like for Halloween. The kid replies, “I’m an IRS agent.” Then he takes 40 percent of the man’s candy, leaves, and doesn’t say thank you.

~~~

Courtesy of Robert E. McKenzie, Attorney at Law www.mckenzielaw.com

Your clean humor is welcome!

Read more Money Funnies and Inspiration here:

http://taxmama.com/category/asktaxmama/money-funnies/

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