Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

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Archive for January, 2001

He’s a lot smarter than it appears

Posted by taxguru on January 21, 2001

The media have been having a ball portraying our new president as a dunce. As a scholar on the subject of intelligence, my research on George W. Bush has led me to reach a very different assessment.

He and his people haven’t discouraged this portrayal because it is intended to lull his opponents into a false sense of superiority. It is a kind of hustle, as with a pool shark who pretends to have no skill. It’s similar to the sand-bagging that Ronald Reagan used, so that the opposition’s defenses are down. Reagan was actually able to accomplish quite a bit during his time in office by using the “lovable dunce” routine. On the other hand, George H. W. Bush was continually shafted by the donkeys because he showed too much self-confidence. It’s another sign of GWB’s intelligence that he learned this very thing from his GOP predecessors.

If it helps him defeat the Socialists in the JackAss Party in their quest to completely destroy the Constitution, I’m all for this approach.

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Posted by taxguru on January 18, 2001

Watch Out For Simply Postage

Always one willing to try new high tech things, I signed up in mid-1999 for NeoPost’s new Simply Postage service that allowed us to buy postage for the meter over the phone line. The meter was connected to a very nice digital scale. The system worked quite well and it was a lot more convenient than sticking on an assortment of postage stamps.

However, their accounting & billing departments were staffed by complete morons. Money sent in for postage was lost. The billing for the monthly meter rental was constantly screwed up. Taking a lesson from the phone companies, I had noticed that they were advertising lower rates for new customers than they were charging us. As with the phone companies, they don’t automatically match the rates for existing customers unless they call and complain or threaten to move to another company.

After several months of putting up with their crap, we sent the meter back and closed out our account. Now, in January of 2001, I just received a credit card statement where the imbeciles at NeoPost have charged me for three months of rental at $19.05 per month for a meter that had been sent back in March 2000. Getting this unraveled is looking to be another long process.

Stay away from these idiots. I have tested the service at Stamps.com, which lets you print postage on your regular computer printer, while being connected to the Internet. So far, it has worked fine and the billing has had no problems.

KMK

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Posted by taxguru on January 15, 2001

Tax Free Sales of Vacation Homes

One of the many gray areas with Section 1031(aka Starker) tax deferred exchanges is whether vacation homes qualify. I have long believed that if you consider the property to be held for investment purposes, it does qualify. Even that well-known socialist Congressman from St. Louis, Dickless Gephardt (whose favorite phrase is that anyone receiving any money has “won life’s lottery“), used this approach a number of years ago when he used Section 1031 to legally avoid taxes on the sale of a vacation home.

Here’s a more detailed analysis of the application of Section 1031 to vacation homes that is very interesting.

KMK

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Posted by taxguru on January 15, 2001

Escrow Rules

If you buy or sell real estate in different parts of the country, it is often confusing as to who normally handles the actual closing and who pays for certain of the closing costs. I was just notified of this handy summary of the procedures for each state. In fact, it even shows different procedures for Northern & Southern California, reinforcing my long-held belief that they are essentially two different states.

KMK

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Posted by taxguru on January 10, 2001

No Shoe-Box Clients

With the new tax season starting up, we have already had to turn away several potential clients, who by their own admission, are not well organized. We’re sorry to have to be so discriminatory; but we are having a hard enough time keeping up with the work we have with existing clients. We are refusing to take on any new tax clients who don’t have their books on Quicken or QuickBooks. If you don’t want to do the bookkeeping yourself, you can hire someone to do the work for you, at a much lower fee than my $195 per hour.

KMK

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Posted by taxguru on January 10, 2001

Don’t Forget the Pets

For obvious reasons, a larger & larger part of my practice has been devoted to estate planning. With the increasing exemption in the amount of estates exempt from the IRS’s clutches, the more important task is to protect them from huge probate fees and from those greedy vultures who will try to extort money from your survivors.

I liked this story in today’s Salon about a woman in Mobile, AL who left eveything in her half-million dollar estate in trust to her pets. As an animal lover with no human children, I like that concept. However, that may explain why some of our cats have been trying like crazy to trip us. With us out of the way, all of this is theirs.

KMK

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