IRS Interest Rates Drop for the Third Quarter of 2008 – The downward trend continues, now down to 5.0%

Some interesting articles by Terry Myers & Dee DeScherer in the latest Intuit ProConnection:

Help Your Clients Navigate a Troubled Stock Market – Includes a downloadable doc file to explain to clients about taxes on capital gains and losses.

New Tax Return Disclosure Regulations Hit Client Communications 

The Double (Tax) Life Of Americans Abroad  – Dealing with the interplay of taxes in both the USA and other countries is one of the trickiest aspects to working with clients who work outside our borders.

Q:

Subject:  a question

Dear Expert
In the sale of a residence do the two out of 5 years of married and occupancy need to be consecutive to get the married deducion?
 Could I have the first of the five yrs with my husband and and then remarry and re occupy in year five and get the married deduction?
Help

A:

If this is a real world issue, you and your new husband need to work with your personal professional tax advisor to see how to report the home sale.

If, as it seems, this is merely a hypothetical question, you should take a look at this section of IRS’s Publication 523 which deals with this issue. 

Your question actually covers two different matters.  The non-consecutive issue is easy.  The rules have always allowed any amount of consecutive or non-consecutive time totaling 24 months within the 60 months prior to the sale. This is the case for the same taxpayers.

It’s quite a different story for a case with different taxpayers, such as a new husband.  Your new husband can’t count the time your previous husband lived in the home as his own.

While in this scenario, you wouldn’t be able to exclude the full $500,000 maximum gain, you would qualify for an exclusion of $250,000 and your new husband would have a pro-rated exclusion.  Depending on the size of your actual gain, that combined exclusion may be enough to shelter it all.

Again, if this is a real situation, your own personal professional tax advisor will be able to crunch your numbers for you.

Good luck.

Kerry Kerstetter

From the Late Show’s Top Ten Dumb Guy Ways to Boost the Economy

10.   Rummage through rich folks’ trash to see if they’ve tossed any cash

 4.   Give tax refunds in Cheetos (I’m not sure how that would help the economy, but boy am I hungry for some Cheetos)

 1.   Put Chuck Norris in charge of collecting money from deadbeat taxpayers

Q:

Subject:  Tax question

Hello
I closed my short lived business at the end of 2007.  I opened it in August of 2006. I sold the business at a cost that I used to pay off my creditors. How do I report (which forms do I use) that the moneys I received for the sale of my business was used to pay off a debt.  The debt was originally created from purchasing equipment that I used for my business.

A:

This is far too complicated an issue for you to attempt to report on your own, especially in regard to the proper treatment of recaptured depreciation.

You need to work with a qualified professional tax preparer, who can ensure that everything is reported properly on your tax returns.

Good luck.

Kerry Kerstetter

 

A Tax McCain Could Cut – The key operative word here is “Could.”  The real world word is “Won’t.” A RINO like McCain, who cares more about the approval of Ted Kennedy than of Rush Limbaugh, would never even consider reducing the payroll taxes.

It’s actually much more likely that he will continue to adopt DemonRat policies as his own and push for an elimination of the ceiling on the amount of earned income subject to the 12.4% SS tax. 

Obama’s 1040 — 2 EZ 4 Me. The easy way to overpay. – Interesting look at a plan by one of Obama’s advisors to have the IRS compute the taxes for 1040EZ filers.  Taxpayers would still have the option to file their own tax returns to challenge the IRS’s calculations. 

That’s similar to what we have now with non-filers being at the mercy of IRS’s super high tax calculations with no deductions or dependents. 

If this plan were to become reality, it would decimate the assembly line tax prep outfits.

Self-directed IRAs offer alternatives to the stock market – A good way to accumulate more reliable and less volatile wealth, such as with real estate.