The Tax Preparation Blog

Archive for January, 2010

Question: Tax impact of rental loss?

I am considering taking an out-of-state job and need to consider the tax impact of retaining my home (versus selling it). I estimate that I will be able to rent the home for $72K per year, which will be more than my mortgage interest of $66K and taxes of $24K (an annual loss of $18K).

What will be the impact on my taxes in term of tax deductability of interest and/or my ability to deduct the annual net loss of roughly $18K. Also, is depreciation a consideration now that it is considered an investment property (effective 7/1/2008)? My 2008 gross income should be in excess of $200K. Finally, what is the date cut-off for it to be treated as an investment property for tax purposes for the 2008 tax year?
If your answer could also address the tax-deductability of the mortgage interest (as compared to deducting the net loss) and that would be great.

Answer: Your income is too high.
Any loss would be postponed on a form 8582 until the year you sell.

Global High Income Fund Inc. – Distribution Characteristics for January 2010

NEW YORK—-Global High Income Fund Inc. , a non-diversified, closed-end management investment company seeking high current income and secondarily, capital appreciation through investments primarily in securities of emerging market debt issuers, today announced its distribution characteristics for the month of January 2010.

Ron Paul Radio Ad #6 (No IRS, No Income Tax)

US Airways Group, Inc. Reports Fourth Quarter and 2009 Financial Results

TEMPE, Ariz.—-US Airways Group, Inc. today reported its fourth quarter and 2009 results. Net loss for the fourth quarter was $32 million, or per share, which excludes special items totaling $47 million.

Super Bowl ticket demand, prices both still high

Times-Picayune archive Super Bowl tickets are still hard to come by, but at least prices have come down a bit.

Indiana Property Tax Appeal

Question: Whether under Income Tax Act, 1961 (India), loss from let out house be set off against Income from Salary?

Can anybody confirm as to under what section of Income Tax Act, 1961 (india), loss from let out house property (other than self occupied house) be set off against Income from salary.

Answer: Either loss or profit the Income tax department is allowed 30% of deduction from the rents collection. rest of the amount shall be clubed with salary income and remit the tax. The question of loss in house income does not arise. you are remitting tax on total rents received or receivable minus 30% standard deduction and rest is taxable.

Datta on the income tax law: A commentary on the Income-tax Act, 1961 with exhaustive case law, related acts, rules, forms, circulars, notifications … subjects of general importance and daily use …

Commercial’s tax deduction and collection at source under Income Tax Act, 1961 $36.97 A comprehensive, exhaustive, and critical analysis of the law with reference to India….

Indian income-tax law and practice: Including new Income-tax act, 1961, Finance act, 1963, Wealth-tax act, Gift-tax act, Super-profits tax act and Compulsory deposit scheme act …

SC rejects I-T dept plea against Karnik in tax evasion case

The Supreme Court on Wednesday dismissed the Income Tax department’s plea alleging that former Nasscom chief Kiran S Karnik had evaded tax to the tune of Rs 3.71 crore in….

Question: Advice on a retired person converting from a traditional IRA to a Roth?

I have a traditional IRA (about 40K) that I am thinking of converting to a Roth IRA. I am retired and about 3 years away from mandatory IRA withdrawals. Knowing full well that I will take a tax hit if I do this, is it a good idea to do this and just let the money grow tax free or should I just steel myself to mandatory yearly withdrawals at age 70 1/2, I can afford the tax hit and my taxable income in 2007 was approx 37K. Thx

Answer: If you have the money in non-tax deferred accounts to pay the taxes on the Roth conversion, then go ahead and make the conversion to the Roth. Don’t convert more than what would put you into the 28% bracket.

According to the Motley Fool:

You can find Roth IRA conversion “calculators” all over the Web to help you with your decision (test several or read reviews first to make sure the calculator you use matches your personal situation best — not all calculators are created equal). We have IRA calculators to help you chose between a regular IRA and a Roth IRA and decide whether to convert an IRA into a Roth IRA:

http://www.fool.com/calcs/calculators.htm#roth

Click on “Should I convert my IRA to a Roth IRA?”

Lower Your Taxes – Big Time! : Wealth-Building, Tax Reduction Secrets from an IRS Insider $2.91 Strategies from an IRS insider for slashing taxes, maximizing legal deductions, avoiding audits, and more Completely updated for all of the new 2005 and 2006 Tax Laws! Through his years as an IRS tax attorney, Sandy Botkin discovered that most Americans could legally­­ and dramatically­­ cut their tax bills by establishing themselves as independent contractors or businesspersons. In L…

Parlay Your IRA into a Family Fortune: 3 EASY STEPS for creating a lifetime supply of tax-deferred, even tax-free, wealth for you and your family $4.86 Ed Slott is without a doubt “one of the country’s leading IRA experts” (Reader’s Digest). Appearing at a time when virtually everyone is concerned about retirement savings, this authoritative thoroughly accessible book presents an easy-to-follow plan for making money—a lot of money— with your IRA. Slott shows readers how to choose the right financial advisor, manage vital information an…

Tax Power for the Self-Employed, 2E: Straightforward Advice from an Expert $6.00 Tax Power for the Self-Employed addresses the specific and particular tax laws and regulations facing a self-employed individual. Unlike other small businesses, it focuses on the individual who either runs a single-person small business (or one with an otherwise limited number of employees) or the person who does something to make extra money that he or she may consider a hobby or side job, but fr…

Make tax season easy, organize your forms

As tax season approaches, many may be scrambling to get all their deductions and receipts organized. Master Tax Adviser Velma Bjorgum at H&R Block, Wahpeton, suggests having all Social Security numbers, dates of birth, children’s full names, 1099 and W2 forms at your tax appointment.

Tips & Advice for Income Tax Deductions : Tips for Sale’s Income Tax Deductions