Posted August 30th, 2010 by admin
This week’s interview on Financial Insider Weekly to be broadcast in San Jose and Campbell this Wednesday, September 1, is with California State Assemblymember Jim Beall. We discuss the California’s state budget challenge The interview will be broadcast at 7:00 p.m. Pacific Time on Comcast Channel 15 in San Jose and Campbell, and will be broadcast as streaming video at the same time at www.creatvsj.org.
Remember you can find past episodes of Financial Insider Weekly at www.financialinsiderweekly.com.
Tags: budget, california, state
Posted August 23rd, 2010 by admin
This week’s interview on Financial Insider Weekly to be broadcast in San Jose and Campbell this Wednesday, August 25, is with attorney and retired CPA David Howard of the law firm Hoge, Fenton, Jones & Appel. We discuss the federal information reporting requirements for foreign bank and investment accounts and foreign trusts. There are very severe penalties for not complying with the reporting requirements, so you should watch the interview if you, a friend or family member have foreign property or investments. The interview will be broadcast at 7:00 p.m. Pacific Time on Comcast Channel 15 in San Jose and Campbell, and will be broadcast as streaming video at the same time at www.creatvsj.org.
Remember you can find past episodes of Financial Insider Weekly at www.financialinsiderweekly.com.
Tags: account, bank, FBAR, foreign, investments, reporting, trust
Posted August 16th, 2010 by admin
The broadcast time in San Jose and Campbell for Financial Insider Weekly, featuring host Michael Gray, CPA inteviewing guests on personal and business financial topics, is changing to 7:00 p.m. starting this Wednesday, August 18. The show is broadcast on Comcast Channel 15 in San Jose and Campbell, and as streaming video at the same time at www.creatvsj.org.
Remember you can find past episodes of Financial Insider Weekly at www.financialinsiderweekly.com.
Posted August 16th, 2010 by admin
This week’s interview on Financial Insider Weekly to be broadcast in San Jose and Campbell this Wednesday, August 18, is with attorney and CPA Scott Haislet. We discuss Scott’s experiences helping clients with real estate short sales and foreclosures. The interview will be broadcast at 7:00 p.m. Pacific Time on Comcast Channel 15 in San Jose and Campbell, and will be broadcast as streaming video at the same time at www.creatvsj.org. Note this is a new broadcast time!
Remember you can find past episodes of Financial Insider Weekly at www.financialinsiderweekly.com.
Tags: estate, foreclosure, real, sale, short, Tax matters
Posted August 9th, 2010 by admin
This week’s interview on Financial Insider Weekly to be broadcast in San Jose and Campbell this Wednesday, August 11, is with Professor Patricia Cain of the Santa Clara University School of Law. We discuss recent federal tax developments for California registered domestic partners. The interview will be broadcast at 4:30 p.m. Pacific Time on Comcast Channel 15 in San Jose and Campbell, and will be broadcast as streaming video at the same time at www.creatvsj.org.
Remember you can find past episodes of Financial Insider Weekly at www.financialinsiderweekly.com.
Tags: california, domestic, gay, lesbian, partners, registered, Tax matters
Posted July 27th, 2010 by admin
The federal energy efficient property credit is a popular tax break liberalized as part of recent stimulus legislation in the American Recovery and Reinvestment Act of 2009 and the Emergency Economic Stabilization Act of 2008.
The credit is claimed on Form 5695, Residential Energy Efficient Property Credit, Part II.
The credit applies to energy improvements for a personal use residence. That means the residence can be a principal residence or another residence, like a vacation home. The home must be located in the United States and used as a residence by the taxpayer.
Property that qualifies for the credit includes the following items that meet federal standards:
1. Solar electric generating property;
2. Solar water heating property;
3. Qualified geothermal heat pump property;
4. Qualified small wind property;
5. Qualified fuel cell property. (This item only applies for a principal residence occupied by the taxpayer.)
The credit applies for items 1 through 3 placed in service after December 31, 2005 and before January 1, 2017. The credit applies for items 4 and 5 placed in service after December 31, 2007 and before January 1, 2017.
For property installed after 2008, the tax benefits of the property have been greatly expanded because the maximum limits for the credits have been eliminated. Previously, the first three credits were limited to $2,000. The maximum for small wind property was limited to $4,000. These limits have been eliminated after 2009. The maximum credit for fuel cell property after 2009 is $500 per 0.5 kilowatt of capacity for a taxable year. If a residence is occupied by two or more taxpayers, any limitations are allocated among them.
Expenditures before 2009 with funds obtained with subsidized funding were ineligible for the credit. This requirement was repealed effective after 2008.
The credit is 30% of expenditures for qualifying property made during a taxable year. The cost of on-site preparation, assembly, original installation of the property and the cost of wiring or piping to connect the equipment to the taxpayer’s dwelling are qualifying expenditures.
Costs allocable to a swimming pool, hot tub, or any other energy storage medium that has a function other than energy storage isn’t eligible for the credit.
The manufacturer of the property may certify to a taxpayer that the property meets some of the requirements that must be satisfied to claim the credit by providing a certification statement. The statement may be provided with the equipment or in printable form on the manufacturer’s web site. The certification isn’t required to be included with the taxpayer’s income tax return. We recommend that you keep the certification with your tax records and that tax return preparers get a copy of the certification from their clients when claiming the credit. The certification doesn’t mean the taxpayer’s residence qualifies for the credit.
The tax basis of the home improvements are reduced by the amount of the credit.
If the residence is used for both business and nonbusiness purposes and less than 80% of the otherwise eligible property is for nonbusiness use, then only the percentage of costs allocated to nonbusiness use can be used to compute the credit.
The generous percentage credit and the elimination of the ceilings, plus the reduction and possible elimination of energy bills makes this a very attractive tax benefit.
The credit is not refundable, but unused credits can be carried forward. For 2009, the credit was allowed to reduce both the regular tax, after reduction for the foreign tax credit, and the alternative minimum tax. (Internal Revenue Code Sections 25D(c)(1), 25D(c)(2), and 26(a)(2).)
The limit has been redefined for 2010. The credit can reduce the total of regular tax and AMT liabilities over the sum of the credits for dependent care, the elderly and disabled, adoption, child tax, home mortgage interest, education expenses, saver’s, nonbusiness energy property and foreign tax. (Internal Revenue Code Section 25D(c)(1).) Effectively, the limitation for 2010 is similar to the limitation for 2009.
(This is a correction to an earlier blog post stating the AMT couldn’t be reduced for this credit for 2010, with my apologies and thanks to Isaac Alfandary. The change in definition was made because other nonbusiness energy credits claimed at Form 5695, Part I can’t reduce the alternative minimum tax after 2009 unless the tax law is changed in an AMT “patch”.)
It’s a good idea to have your tax advisor estimate the amount that will be allowed as a credit on your income tax returns in advance. This will be difficult for 2010 because AMT patch legislation will probably be passed later this year, so the exemption amounts for 2010 are unknown and will probably have to be estimated.
IRS Circular 230 Disclosure:
As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this communication was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.
Tags: alternative, AMT, credit, efficient, energy, geothermal, minimum, property, solar, Tax matters, wind
Posted July 26th, 2010 by admin
This week’s interview on Financial Insider Weekly to be broadcast in San Jose and Campbell this Wednesday, July 28, is with Peggy Martin, ChFC and CLU of The Family Wealth Consulting Group. We discuss the role of life insurance in estate and financial planning, including different life insurance policy choices. The interview will be broadcast at 4:30 p.m. Pacific Time on Comcast Channel 15 in San Jose and Campbell, and will be broadcast as streaming video at the same time at www.creatvsj.org.
Remember you can find past episodes of Financial Insider Weekly at www.financialinsiderweekly.com.
Tags: estate, financial, insurance, insurnace, life, planning
Posted July 19th, 2010 by admin
This week’s interview on Financial Insider Weekly to be broadcast in San Jose and Campbell this Wednesday, July 21, is with attorney Naomi Comfort of Hawks & Comfort, LLP. We talk about the uses of Special Needs Trusts. These trusts are principally used to preserve eligibility for public benefits (such as Medi-Cal). Find out the details in this interview. The interview will be broadcast at 4:30 p.m. Pacific Time on Comcast Channel 15 in San Jose and Campbell, and will be broadcast as streaming video at the same time at www.creatvsj.org.
Remember you can find past episodes of Financial Insider Weekly at www.financialinsiderweekly.com.
Tags: benefit, Medi-Cal, medicaid, needs, public, special, trusts
Posted July 12th, 2010 by admin
This week’s interview on Financial Insider Weekly to be broadcast in San Jose and Campbell this Wednesday, July 14, is with attorney and CPA Scott Haislet. We talk about what you should know about income tax rules relating to the sale of a principal residence. The interview will be broadcast at 4:30 p.m. Pacific Time on Comcast Channel 15 in San Jose and Campbell, and will be broadcast as streaming video at the same time at www.creatvsj.org.
Remember you can find past episodes of Financial Insider Weekly at www.financialinsiderweekly.com.
Tags: home, residence, sale, Tax matters
Posted July 7th, 2010 by admin
For many taxpayers, 2010 might be their last chance to pay a “bargain” 15% federal tax rate for long-term capital gains. Individuals who have appreciated assets should consider selling them this year and paying the tax for 2010. Since 2010 is more than half over, it’s time to think about year-end tax planning. Some transactions take months to execute, so the time to start taking action may be now.
The Bush tax cuts enacted in 2001 are expiring after 2010. If Congress does nothing, the maximum federal long-term capital gains rate will increase from 15% to 20%. That’s a 33 1/3% increase! Some low income taxpayers are actually currently eligible for a 0% rate for long-term capital gains.
When planning to take long-term capital gains during 2010, be aware that the “wash sale” rules disallowing losses when the same or similar property is sold and repurchased during the period 30 days before and 30 days after selling an asset does not apply to gains. In essence, you can elect to report gains for your property by structuring a sale followed by a repurchase. There is still a possibility the IRS could challenge such a transaction on a substance versus form argument, especially for transactions with related parties.
When evaluating whether to sell and repurchase property, consider whether selling expenses could exceed the tax benefit from the transaction.
President Obama has proposed extending the Bush tax cuts for married persons filing joint income tax returns who have adjusted gross income of less than $250,000 and for single persons with adjusted gross income of less than $200,000. We probably won’t know if Congress will enact this proposal until late 2011. We have seen that Congress is finding it difficult to pass much tax legislation this year, including extension of the estate tax and many tax extenders. It may be wise to take defensive action.
A 3.8% Medicare tax on investment income of high-income taxpayers, including long-term capital gains, has already been enacted effective in 2013.
When the stock market and real estate markets are weak, it seems strange to talk about tax planning for long-term capital gains. The value changes for items are uneven. Some taxpayers could still be holding substantially appreciated property, like Google stock that they bought shortly after the company went public, or a rental home they bought thirty years ago.
Always consult with a tax advisor before making a major tax planning decision.
IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this communication was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.
Tags: 2010, capital, gain, planning, Tax matters