Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

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Archive for January 26th, 2013

Posted by taxguru on January 26, 2013

From Argus Hamilton:

The Los Angeles Dodgers signed a record TV deal with Time Warner Cable this week worth eight billion dollars. The payroll is through the roof. The players are making so much money they are asking to be traded to Florida or Texas where the taxes are lower.


Social Security’s disability trust fund could fail to cover all benefits early as 2016 – And we should trust the same bozos in DC to be in charge of every aspect of our lives.


Phony drama over phony deal to resolve phony crisis – From Jack Kelly


The Sports Media Jihad Against Mickelson – Rush has more on the persecution of a pro athlete for the sin of complaining about his high taxes.


The truth behind Mickelson’s taxes – This CNN reporter actually knows more about Mickelson’s actual tax burden than he knows himself.  Isn’t CNN wonderful?


France’s richest man moves to Belgium and takes multi-billion pound fortune with him ‘to avoid new socialist super-tax’ – Are our retarded rulers in DC able to learn from the mistakes other countries make?  Why would they start now?



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Who has to file 1098s?

Posted by taxguru on January 26, 2013

From a client:

One question.
We have a Personal Loan to an individual …..and
a first Home mortgage to my daughter.  Both loans are being amortized.  You will see our Quick Books and Organizer records “Interest Income”.
Do I issue 1098s?  FYI, I did not issue 1098s in 2011.


My Reply:

Since you aren’t in the lending business and these loans weren’t for properties you developed, you are not required to file 1098s.

However, I have some clients who voluntarily file 1098s even though they also aren’t required to do so in order to make sure everyone is using the same numbers on their tax returns.

If you don’t file 1098s for your loans, you should send your borrowers something showing what your records have for the prior year’s payments in terms of principal and interest so that they can use the same figures for their tax returns.

FYI – Here are the IRS’s official instructions for this.

Who Must File

File this form if you are engaged in a trade or business and, in the course of such trade or business, you receive from an individual $600 or more of mortgage interest on any one mortgage during the calendar year. You are not required to file this form if the interest is not received in the course of your trade or business. For example, you hold the mortgage on your former personal residence. The buyer makes mortgage payments to you. You are not required to file Form 1098.

For information about who must file to report points, see Who must report points on page 3.
Not in the lending business.   If you receive mortgage interest of $600 or more in the course of your trade or business, you are subject to the requirement to file Form 1098, even if you are not in the business of lending money. For example, if you are a real estate developer and you provide financing to an individual to buy a home in your subdivision, and that home is security for the financing, you are subject to this reporting requirement. However, if you are a physician not engaged in any other business and you lend money to an individual to buy your home, you are not subject to this reporting requirement because you did not receive the interest in the course of your trade or business as a physician.

I hope this helps.  Let me know if you have any other questions.





Posted in Uncategorized | Comments Off on Who has to file 1098s?

New Comix Blog

Posted by taxguru on January 26, 2013

As you may have noticed, I have been experimenting with different ways to post comics without them overly dominating this main page.  I haven’t been able to accomplish that within the limitations of this blog, so I set up a new separate blog just for the comics that Sherry and I have been finding.  The url of this new blog is:

 and there are links to it on the right side of this page.

I am currently uploading my backlog of comics.  None of these are repeats of the ones posted previously here.  I hope this works out to be more convenient and efficient for everyone. 


Posted in comix | Comments Off on New Comix Blog