Tax cuts may push some families into AMT trap – Actually, it would be good if more people saw what an insane tax this is and demanded that our rulers eliminate it. It seems that until the number of victims reaches a certain critical mass, it will just be perceived as a tax on the evil rich, who deserve no tax breaks according to “popular wisdom” (an oxymoron if there ever was one). Another plug for the Reform AMT group seems appropriate right here.

The bad thing about publicizing new kinds of crimes and financial hanky-panky is that it does tend to give ideas to people looking for a fast dishonest buck.

Off the Mark – More on one of my big pet peeves – how people trust the Federal budget predictions from the CBO when they are nothing more than WAGs (wild ass guesses) and they never come true. I have long said that anyone who claims to believe those numbers to be anything close to real is either a liar, an idiot or both. Any media person who quotes CBO figures as if they were authoritative also has a credibility problem.

Potomac Fever – Why term limits are the only way we can have any hope of saving the Constitution. Even the most idealistic folks become corrupted by their royal powers in DC.

Governor Arnold will face pressure to increase taxes or make cuts – If he’s smart, he’ll choose the option of cutting spending. If the people of the PRC had wanted higher taxes, they would have let Gray Davis finish out his term.

What goes up, will come back down – and then back up, and then back down.

I always thought Bush was spending far too much time with Teddy Kennedy.

Del. Sen. Proposes Internet Sales Tax – Interesting attempt to use the tax laws to maintain a sales tax advantage for one state over others.

Companies Test ‘Contactless’ Credit Cards – The concept of having all of our personal and financial information on a tiny chip that is embedded under our skin is getting closer.

Higher Virginia Taxes Soon

It Pays to Be a Star on Charity Circuit – More hypocrisy from the Hollyweirdos.

Top Democrat urges Texas Governor Perry to abandon ‘death business’ – When I first saw this headline, I thought it referred to Texas’ position as the country’s leading user of capital punishment. It’s actually about the state government doing what a lot of big corporations (such as Wally World) have been doing for several years. They have been taking out life insurance policies on current and former employees, without their knowledge, and then cashing in when those people pass away. I’m still waiting for the Hollywood movie using this as a plot point. If John DeLorean was willing to deal in drugs to save his floundering company, is it much more of a stretch to imagine a fiscally unstable company knocking off former workers for the tax free insurance benefits?

The Cost of Doing the Right Thing – More disappointment at the GOP’s abandonment of limited government principles.

Charitable Contributions Brave Economic Uncertainties

Follow the Rules When Inheriting an IRA

Closer Look at Deductions for Donations to Charity – The examples of overstated deductions for things such as donated vehicles sound familiar. I have often been asked about the tax benefits of donating used vehicles to charities. The questioners usually tell me they can claim a higher amount for a deduction, based on the Kelly Blue Book value, than they would be able to actually receive if they were to sell the vehicle themselves. I have to break the news to them that what they could sell the vehicle for is its true fair market value (and the legally deductible amount) and not what Kelly shows.

I have had similar experiences with people proposing to donate real estate to charities so they can deduct what some appraiser or Realtor claimed was its fair market value because if they were to actually sell the property, they could only get about half that amount. When I was doing my real estate seminars, I used to really offend appraisers when I stated that the values they come up with are nothing more than SWAGs (scientific wild ass guesses) and can’t hold a candle to what a property really sells for. Anyone who wants to claim a higher appraised value for a donation than the item would actually sell for is not going to prevail in a dispute with IRS.

This is also applicable to values used on estate tax returns. If an item has been sold between the time the decedent passed on and when the 706 is prepared, using any amount other than the actual sales price for the estate valuation is asking for trouble. IRS does audit a very high percentage of estate tax returns, especially the very large ones. I have had my share of them examined and so far, every one has been accepted as filed because I used actual sales prices for values and not the often quite different appraised values.

Artists Vie to Coin America – With more changes in the design of our currency in the works, it may become harder to know what is real and what is fake money.

This reminds me of the old joke about how to find a creative accountant. When you ask him/her what two plus two is, s/he will respond with “what would you like it to be?”

Protecting the Integrity of Our Tax System – The comment about the need for a probability of a tax pro’s position having at least a 33% chance of success is accurate. However, the idea of who is the arbiter of the odds is up for grabs. A guess as to whether or not a position has greater than a 33% chance of succeeding is as subjective as anything can be in most areas. Where it does have application is with the standard idiotic tax protestor arguments, such as taxes are voluntary, income is all tax free, or the 16th Amendment is invalid. Those are obviously well below the 33% threshold.

The issue of SE tax on LLCs is still well above those odds, so those of us who have been considering it voluntary aren’t crossing the line. While it is a controversial topic, with those who side with IRS claiming that LLC income should always be subjected to the 15.3% SE tax, those of us on the other side have several cases where IRS has accepted our method of reporting it. Until a new law is enacted mandating SE tax on LLC income, I will continue to predict that my position on this matter has a 100% chance of prevailing.