Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Archive for July, 2007

Posted by taxguru on July 31, 2007

From a recent Photoshop contest at Worth1000.com:

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Cause & Effect…

Posted by taxguru on July 31, 2007

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Posted by taxguru on July 30, 2007

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Posted by taxguru on July 30, 2007

Coming Hike. Expiring tax relief, big spending on the agenda for Congress. – Our GOP don’t have much time left to extend the Bush tax cuts before they expire.

 

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Posted by taxguru on July 29, 2007

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Sales Tax Holidays

Posted by taxguru on July 26, 2007

The most recent email newsletter from TaxCoach Software had a link to this handy listing of the various sales tax free days in many states around the country. 

Be sure to click on the link to your state’s specific website; because there are several exceptions.  For example, I noticed that there’s nothing listed for here in Arkansas; but I could go up into Missouri  next week and avoid sales tax on up to $3,500 of computer hardware.  However, it seems that most cities and counties aren’t participating in this “holiday;” so only the state portion of the sales tax will be waived. 

  

 

 

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Posted by taxguru on July 25, 2007

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Posted by taxguru on July 25, 2007

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Posted by taxguru on July 20, 2007

5 mistakes that can tax your 401(k) – From USA Today

 

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Outdated Info

Posted by taxguru on July 20, 2007

A week or so ago, I stumbled across a web site for a group in Oregon called The Settlement Institute that claims to have better solutions for reducing capital gains taxes than just normal 1031 exchanges.  They sell a book for $29.97 with supposedly the top nine ways to sell properties and businesses that they claim even CPAs and tax pros don’t know. They even have an affiliate program costing $297 up front and $99 per year that is supposed to allow tax and financial advisors an opportunity to earn referral fees for steering clients their way to some kind of vague and unexplained installment sale scheme.

As part of my never ending ongoing research into tax issues, I signed up for their free email newsletter and downloaded their free pdf booklet on “5 Steps to the Right Exit Strategy” which was far too vague and useless to be of any value.  I’m now receiving daily hard-sell emails for their services.  The one I received today was amazing in its inaccuracy.  I have copied and pasted it exactly below.  See if you have the same reaction as I did when reading it.

Subject: Kerry, roll over the gains on your primary residence?

 

Hi Kerry,

 

I know that you have probably heard of a 1031 exchange and a IRA rollover, but did you know that you can actually “roll over” the capital gains on your primary residence and defer your capital gains taxes for a long time?

 

Well… most people don’t!

 

This tax loophole is not one of the more commonly used loopholes, simply because people do not know about it and their situation just does not call for its use.

 

Let me tell you how it works very briefly.

 

The 1031 exchange has a bit of a black hole when it comes to your primary residence.  It doesn’t work all that well.

 

However, you can do pretty much the same thing with your primary residence with the “roll over” loophole. 

 

To utilize this loophole all that you have to do is keep on “trading up” to a home of equal or greater value.  As you keep “trading up”, the rolled over capital gains accumulate until you finally decide to downsize to a lesser valued home.

 

To make this even nicer, at the age of 65 you get a lifetime exemption of $125,000 (as of 2007).  So, if you keep “rolling over” and do not downsize until you reach 65, you get to take the $125,000 exemption on your capital gains.  This is in addition to any “one time” exemption that you already get ($250,000 if unmarried: $500,000 if married).

 

This is a nice little gift from Congress that rewards people who keep upgrading to higher value homes over the years.

 

Kerry, if this loophole helps you out a bit, congratulations!

 

My best,

 

-JLM

 

P.S. – This is just one tip of hundreds that are in our comprehensive manual, “The Top 9 Ways to Sell…”.  You can download this manual at: 

 

 

The Settlement Institute

 

18414 Old River Landing
Lake Oswego, OR
97034
US

 

Wow!  I wonder why nobody knows about this special tax break for home sellers.  Could it be because this provision was repealed over ten years ago and replaced with an even more generous one?  The fact that they are touting tax advice that was repealed over ten years ago is more than enough to scare me away from ever relying on this outfit.  However, if anyone out there has more info on them, especially how their affiliate program works, I would love to hear about it.  In the meantime, I’ll stay with services that I know are more up to date on tax savings strategies, such as the hard working crew at TaxCoach Software.

 

 

TaxCoach Software: Are you giving your clients what they really want?

 

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