Eugene Tarsky, a member of the Massachusetts Society of Certified Public Accountants, offered advice on everything from the tax consequences of property foreclosures to inheritance issues. Here's a transcript of the discussion.
taxman__Guest_: Hello, My grandmother collects social security from the US and lives in the US. She hasn't filed a tax return in many years. Is she eligible for the tax rebate and what would she need to do?
Eugene_Tarsky: Assuming she is a US citizen or resident alien, she is entitled to the rebate if her total income, including Social Security is at least 3,000. She must file a tax return just for that purpose. See the IRS instructions at their website. (under rebate- it includes filing instructions).
jay_2__Guest_: turbo tax doesnt seem to want to list my new child (born sept) as an exemption for mass. is it because he didn't live in the state 6 months?
Eugene_Tarsky: You appear to be entitled to the exemption. I suggest that you update your software. If that doesn't help, contact the helpline for turbotax.
Eugene_Tarsky: Sorry folks, a technical problem
Tricia__Guest_: Do I have to file in order to receive the Bush $300 ind. credit?
Eugene_Tarsky: Yes, even if you need not file but have at lrast $3,000 in income. The IRS site gives specific information on what to do if the income is not taxable
Tax_Help__Guest_: My wife and I sold a home last year. The home eneterd our possesion as trust upon my Mother-In-Law's passing in May 06 and we sold in Jan 07 (Since it was in trust, the home passed outside of the estate). How does this impact our taxes. Are we taxed on the full gains of the value (Early 70s until Jan 07) Or just the time we owned it.
Eugene_Tarsky: First, there is the question of how long you held it. You don't say if the trust was revocable until her death or irrevocable at the time she transferred the propert to the trust.
Eugene_Tarsky: If it was revocable, th eanswer is the holding period is probably less than 1 year an dwill not get lower tax rates..
Eugene_Tarsky: On the other hand, if it was revocable, the basis (tax cost) probably is the fair market value at the date of death.
Eugene_Tarsky: Please call me at (617) 571-4935 for a more definitive answer.
ilikemike__Guest_: Hi Eugene, last May my two family home was forclosed on. I had lived in that property for almost fourteen years. I had owed 459,000 on the property, but was assesed by my city at 501,000. My tax preparer has told me that I owe 20,000 to the feds, and 8,000 to the state because my house was a two family. Is this true.
Eugene_Tarsky: It may or not relate to it being a two family but there probably is a tax due to the foreclosure unless a bankruptcy was timely filed.
John_C__Guest_: I have a comment, not a question. I have been working with Gene at my company in Stoneham, MA for more than a year. His experience and wisdom, along with that of his team, has helped us not only with our tax returns, but also with growing our business. This is especially important in this uncertain business climate.
Eugene_Tarsky: Thank you
Ed__Guest_: Hi, I am about to receive about $100k from my uncles estate. It will not be taxed before distribution, so I will have to pay the taxes next year. I have no idea how much I will owe. Is it possible to find out and prepay it when I get the money?
Eugene_Tarsky: Hi Ed,
Eugene_Tarsky: Not a straight forward answer, but receipt of a legacy is not taxable income to you.
Eugene_Tarsky: To be more definiive, I would need more information. You can reach me at gtarsky@teamtza.com. Check our website for tax tips.
Brian__Guest_: I am a land developer. I bought a piece of land and divided it into 80 house lots. I spent $2 million on infrastructure. My accountant says that I have to break out the $2 million infrastructure costs over the 80 lots. Since I only sold 20 houses last year, this would mean I would have a large profit and large tax bill. Anything I can do?
Eugene_Tarsky: Hi Brian,
Eugene_Tarsky: While there is some potential for tax due, it will depend upon the allocation of cost between the lots.
Eugene_Tarsky: In this forum, I cannot be that definitive. Fel free to contact me at gtarsky@teamtza.com
Wayland18__Guest_: I?m married with two dependent children, so I am entitled to four exemptions on my Federal return. However, I am also subject to the Alternative Minimum Tax, so these exemptions don?t provide me with any tax benefit on the 1040. Since my children (ages 18 and 20) do have some income, I want to let them use the exemptions instead since they will benefit. This will also allow them to take the Hope Credit for the tuition paid to their colleges. Any issues with this approach?
Eugene_Tarsky: Hi Wayland 18,
Eugene_Tarsky: There are ways to handle this but unless your children provided more tha 1/2 their support and were independent they cannot claim their own exemption.
Eugene_Tarsky: For more information about the credits, check our website www.teamtza.com and CollegeSolutionsCenter.com
sully__Guest_: I lvie in Methuen and am looking for someone to prepare my return which is slightly more complex becuase I sold some stock, any tips on how to find someone ?
Eugene_Tarsky: Check Mass Society of CPA's website or e-mail me at gtarsky@teamtza.com
DBLEWIS__Guest_: Eugene, my wife receives Disability and when I work out the "married filing jointly" tax from (TaxCut) it shows she has to pay taxes on her money. When I go into details, it is taking my salary, adding it to her disability amount, subtracting the 32K deduction and taxing the whole balance. Is that not double taxing my portion?
Eugene_Tarsky: I wish the law were different but Social Security income is federally taxable to the extentof 50% or 85% of th total payment depending upon the total joint income of the couple or individual taxpayer.
jack__Guest_: i took a 401k distribution in 2008 and did not with hold taxes- will I owe them April 15, 2009?
Eugene_Tarsky: Hi Jack,
Eugene_Tarsky: It is best to estmate your total 2008 income and pay in enough through withholding if possible; in the alternative, you should pay quarterly estimates, to avoid underpayment penalties.
Swan__Guest_: I need a definitive answer before my house burns down. I am lucky enough to have won the lottery about once a year for the last twenty years or so, averaging about$ 5000.
Eugene_Tarsky: I will answer your queastion and many others. Generally, you must keep substantiation for three years beyond the filing date of your return.
Eugene_Tarsky: Check the IRS website or ours, www.teamtza.com (tax tips), for a complete description of record retention requirements
Jeff_W___Guest_: My wife is a health care provider as an employee and she gets a W-2 but was also 1099 on income that's included in her W-2. How do I not get taxed on the same income twice?
Eugene_Tarsky: Hi Jeff,
Eugene_Tarsky: If you are sure that the fees were paid to her employer, file a Schedule C showing the gross receipts from the 1099. Under "other deductions", include that amount labeled "amounts required to be returned to employer"
Eugene_Tarsky: No tax will be due. It might be advisable to get a letter from the employer to be kept in your files in the event that your return is challenged.
Robert__Guest_: Hello Eugene, With home utility bills skyrocketing is there any amount yu can deduct onyour taxes this year?
Eugene_Tarsky: Hi Robert,
Eugene_Tarsky: Unless you are engaged in a business or rental of properies and using some portion of your home EXCLUSIVELY for that activity (in some cases it may require it to be the primary location), the answer is no.
Eugene_Tarsky: However, there are some federal and MA state credits to help you reduce the cost of replacing inefficient energy consuming appliances.
Eugene_Tarsky: Sorry Folks - Time is up and I wish I could have answered more of your questions.
Eugene_Tarsky: Thanks for joining me.
Eugene_Tarsky: If you send other questions to me at gtarsky@teamtza.com, I will try to answer some of them.
Eugene_Tarsky: There are quite a few questions answered on the tax pages of our web site, www.teamtza.com. Try there first.
Eugene_Tarsky: Again, many thanks for joining us.