Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

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Archive for September, 2009

More ACORN tax advice…

Posted by taxguru on September 17, 2009

Posted in Acorn, comix, Crooks | Comments Off on More ACORN tax advice…

2010 Federal CPI Adjustments

Posted by taxguru on September 17, 2009

For several years now, a popular topic has been the annual inflation adjustments for those aspects of the US Internal Revenue Code that require such modifications.  Once again, CCH has made their calculations available to the public in this announcement.  As soon as I can, I will set up a new page on my website to reflect these new figures.   

Another very popular topic is the annual gift tax exemption, which can only be adjusted in even $1,000 increments.  According to the CCH report, it will remain at $13,000 for 2010.

[Update:  The 2010 rate page is up, and the Section 179 page has been updated for 2010 maximums.] 

Posted in TaxRates | Comments Off on 2010 Federal CPI Adjustments

Changes to tax free home sale rules?

Posted by taxguru on September 15, 2009

Q:

Subject:  Sale of Primary Residence

I am trying to find out when the $500,000 ($250,000 per spouse) Exclusion expires; and what is the current thinking on how it would be changed.

Sincerely

A:

The current law allowing the tax free exclusion of some or all of the gain from the sale of a primary residence (aka Section 121) was enacted in May 1997 and does not have an expiration date.  It will be the law, with the exact same dollar amounts (unadjusted for inflation) until our rulers in DC explicitly change it.

While nobody can know for sure what changes, if any, this law will have in the future, I can guess at a few possible ones.  It is very likely that some provisions of this law will be trimmed back for home sellers.

Going back to a once in a lifetime usage, rather than the current once every two years, would probably be a politically acceptable change since that was how it applied for several decades prior to 1997.

Another likely change with the growing sentiment in DC to screw over the evil rich would be to completely or partially deny the exemption to those taxpayers with AGIs over a certain dollar figure that our rulers will establish to define them as evil rich who are unworthy of any more tax breaks.  Several other tax deductions and credits already have AGI eligibility thresholds; so this would be consistent with that.

Your own personal professional tax advisor should be up on the latest laws in regard to home sales; so any planned sale should be run by him/her first.

I hope this helps.  Good luck.

Kerry Kerstetter

Follow-Up:

Dear Kerry
 
Thank you so very much for the information … it is extremely helpful
 
Sincerely

 

 

Posted in 121 | Comments Off on Changes to tax free home sale rules?

Posted by taxguru on September 15, 2009

House Republican Leaders Ask IRS to Sever Ties with ACORN – It looks like that crime syndicate’s community tax work was officially sanctioned by IRS after all. Where will child sex slave-masters go to for their tax help now if ACORN is out of that business?

 

Posted in Acorn | Comments Off on

Posted by taxguru on September 14, 2009

Higher Taxes Are Coming. Are You Prepared? – A short look at some of the upcoming tax hikes we will all be facing.  There are also some ideas on why and how some people may want to intentionally recognize income earlier than normal in order to get the taxes out of the way at their currently lower rates than the much higher rates that will be here in future years. 0Bambi’s stated desire to make long term capital gains rates higher as part of his Marxist definition of “fairness” create a number of tax planning opportunities. 

 

Posted in TaxHikes | Comments Off on

Offshore Tax Gap?

Posted by taxguru on September 13, 2009

US citizens in rush for offshore tax advice – Ohio CPA Dana Stahl forwarded this to me with the following message:

Mr Guru – Obama’s war on the rich in the USA continues.

While that is obviously true, what caught my attention was the following reference to my old bugaboo, the tax gap:

A Senate committee has estimated that the parking of assets offshore costs the US $100bn in lost taxes each year.

As I have been explaining for decades, any “tax gap” is by definition impossible to know with any certainty.  Any figure that is being bandied about has either been pulled out of some politician’s rectum or is merely a WAG (wild ass guess).  Of course, that’s SOP for our rulers in DC, as illustrated by the health care reform discussions. None of those figures has any relation to reality. 

 

Posted in TaxGap | Comments Off on Offshore Tax Gap?

Posted by taxguru on September 13, 2009

Charlie in rental di$order – At least Charlie Rangel’s consistent in his income reporting.  Not only hasn’t he declared his rental income from his villa in the Dominican Republic, rental income from a six unit apartment complex in Harlem isn’t worth reporting either. 

As usual, none of this is considered to be serious enough to reduce his power in Congress as the head of the Ways & Means Committee, which writes all of the income tax laws that we mere peons are required to comply with.  Our DemonRat rulers have more important things to investigate, such as how to punish a Republican who couldn’t resist the temptation to yell out “You Lie” while 0Bambi was lying through his teeth.  It’s good to know our rulers have their priorities in the right place. 

 

Posted in Rangel | Comments Off on

Who uses ACORN for tax work?

Posted by taxguru on September 12, 2009

Why is ACORN giving tax advice? Started with shakedown of H & R Block – That was the first thing I was wondering while watching the clips of the ACORN rep giving advice to a pretend pimp and hooker on how to handle the taxes for a child sex slave business.  I have long known about their organized crime and voter fraud activities, but was ACORN also in the tax preparation business? 

I thought they may have been part of the IRS’s VITA program, which is designed to provide free tax help for lower income people in the community. That’s where I started my tax career in the early 1970s.  I don’t recall their policy on who we could prepare free tax returns for; but I am guessing that an illegal alien child sex slave business would have been off limits.

Which brings me to the other thing running through my mind while watching those undercover videos. What would other tax professionals do if confronted with new clients like the ones James O’Keefe and Hannah Giles were portraying?  I doubt that any reputable tax pro would accept them as clients and give the kind of illegal advice the ACORN rep was presenting, even in these tough economic times.  The proper response would be to either kick them out of your office or even to call the police on them.    

 

Posted in preparers | Comments Off on Who uses ACORN for tax work?

New Fake IRS E-mail

Posted by taxguru on September 12, 2009

Snopes.com covers this latest phony email pretending to be from the IRS.  Sherry actually received one of these the other day and wondered if it was real, until I explained that IRS does not send out emails to people.  Their notices are sent via snail mail.

As I advised Sherry, anyone receiving these kinds of emails should forward them to the special IRS email address that was set up to handle this growing problem:  phishing@irs.gov

Hopefully, IRS is using these emails to hunt down and nail the scammers who are sending these out.

 

Posted in scams | Comments Off on New Fake IRS E-mail

Posted by taxguru on September 11, 2009

Obama’s top five tax fibs in Wednesday evening speech – Only five?

 

 

Posted in Uncategorized | Comments Off on