The IRS Deductions Blog

Archive for May, 2009

Question: Are real estate taxes on vacant land deductible, and if I sell the land for a loss, is it a capital loss?

I purchased vacant land 2 years ago and plan to sell it within the next few months. I haven’t used it for any purpose the last 2 years, so I’m assuming it’s considered investment property. Originally I had planned to build on the land, but now that I’m moving to a different city I need to sell the land.

I have 2 questions:

1. Are real estate taxes deductible on investment property? If so, are they reported in the same place as the real estate taxes I report for my primary residence?

2. I’ll probably break even on the property or even sell at a loss. Would this be considered a capital loss (if I consider it to be investment property)?

Thank you!

Answer: 1. Real property taxes are always reported on Schedule A, in the same section that you report your property taxes on your principal residence. The only time that it would not be reported on Schedule A is if the property was held as rental property. In that situation, it would be reported on Schedule E along with your rental income and expenses.

2. If the property was held as an investment, a loss on the sale would be considered a capital loss. Whether it is short term or long term would be dependent on the holding period. Capital losses can only be used to offset capital gains, plus an extra $3,000 of loss per year (you can only deduct a net capital loss of $3,000 per year). Any excess loss would be carried over to future years until it is used up.

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How do you design a jewelry gift that you can give with confidence? How can you be sure that the recipient will enjoy and wear the gift? While there are no guarantees, these tips may help you in the design of a perfect gift.

Begin by analyzing the person. Think of the person for whom you are designing the gift.

These questions may be helpful in the analysis. Does the person your are designing a gift for normally wear a lot of jewelry? When the person wears jewelry, do they choose large or small pieces? What color does the person most often wear? Do you know their birthstone? When wearing jewelry, does the person most often choose gold or silver?

After answering these questions, you should have some idea about what would be worn and appreciated. If you know the person very well, like a sister, you might feel confident in making them a bracelet, especially if your wrists are about the same sized. If you do not know the person all that well, choose another piece, such as earrings or a necklace. If the gift is for a man who rarely if ever wears jewelry, then choose a tie tack or a key ring.

Sketch the design out on paper. Starting on paper with pencil gives several advantages. You can add or subtract pieces as you work on the design. Set the paper down and take time to sleep on yuor design. If the article you are designing is for someone else to use as a gift, then show them the sketches so you can see if you are on the right track.

Next make a mock up of the design you are planning. You can use scrap materials to make this design model. Is the piece going to look like you want it to look when finished. If you are just changing colors from a previous pattern, lay everything side by side so that you can see how they will look together after finishing the piece. If you are working with beads, you may find a bead board is helpful.

Since you have made this gift yourself, you know that it will be unique. The recipient will not need a gift receipt to take it back because it is the third one he has received this holiday. In addition you often can give a far more valuable gift than you could ever afford. The person feels the love that you put into the gift as you took time to design and make it just for them.

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The mechanics of charitable investing

Investing: Tabitha Lovett explains how to help clients understand the options available to them when it comes to charitable investing.

Question: IF you were president of the US, what 3 or 4 Laws of the Land would you change or impliment?

… with permission from another Poster, I’m re-posting this Q in a more appropriate Section; Politics.
1. I’m thinking about simplifying the Tax Codes. How about a straight 15% tax for Everybody on ALL income? NO personal deductions. In fact , if a family had more than 2 children, they’d be penalized. $3k?
2. Dump this “War on Drugs”! Legalize all drugs, the same as tobacco and alcohol. Regulate and control it. If a druggie wants to kill himself, who cares?
3. Impliment a semi-military Draft. EVERYBODY does 2 yrs minimum in a military service OR as community service. Military pay.
4. Definitely get Out of Iraq! … and most of the Middle East. Let those people keep fighting among themselves just as they have for 1,000 years. We have to develope our own bio-fuels.
5. Cut back or stop the “give-away” programs, like farm subsidies, foreign aid, etc… We give food and money to poor countries and what do they do? Have more kids who will hate US.
6 ….?

Answer: 1. Stop foreign aid of all kinds and take care of our own.
2. Make it illegal to own or possess a gun and have a life in prisonment punishment without parole if a person is found to have one.
3. Change the tax code and have a ten percent payment by everyone – no ifs ands or buts without any kind of deductions.
4. Socialize medicine, but have people pay $50 per month per person for it.
5. Make it illegal to smoke, drink alcohol, or use drugs of any kind except medications prescribed by a physician
6. Allow parents to spank their children appropriately
7. Stop depending on foreign oil
8. Raise the minimum wage to a livable wage
9. Do away with welfare, you only get help if you are willing to work
Boy looking back, I would be a tough President — Hey Vote for ME!

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Question: I’m 65. Can short-term capital gains inside my IRA be offset with s-t K losses outside IRA?

I’m 65. I have to pay ordinary income tax on all of mine IRA distributions (all my IRA contributions were non deductible). Question is, since the distributions are all related to short-term capital gains in my self-directed IRA stock portfolio, can I offset these gains with short-term capital losses in stock investments outside the IRA, and if this is possible, what IRS forms do I use. Thanks.

Answer: Bond,

Buy a middle version of turbo tax and enter all the information. It is relatively cheap but purchase the disc.

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Majority of television viewers in America watch NFL super bowl. The day on which this game is played is considered as the national holiday in America and is also known as Super Bowl Sunday. This day is also the second largest food consumption day in America. The popularity of NFL championships can be compared to Thanksgiving Day. Major television networks of America compete to get the exclusive broadcast rights to broadcast this game.

Investing in advertising is very costly in this game because if a company gets only a 30 seconds of commercial slot during the game then the cost if one million. So for this reason companies show their most expensive advertisement for this broadcast. The reason of so expensive commercial slots is that if an advertisement is shown during the game then it gets great exposure and a lot can be made from it.

The NFL (National Football League) and AFL (American Football League) were once the rival leagues in America. Both these leagues formed a merger in an agreement. In the agreement, it was agreed that the champion teams of both the leagues would play in the championship game of AFL and NFL until this merger continued. Each league became conference after forming of merger and the conference champions played in the NFL Super Bowl game. The day of 15th January in the year 1967 was the day when the NFL Super Bowl was played for the first time in America.

The name Super Bowl was given by Lamar hunt who was the founder member of the AFL (American Football League). The name Super Bowl came in his mind after seeing his children busy in playing with the super ball. Each game is separately identified in Super Bowl. To identify each Super Bowl game, roman numerals are used. In the year 1967, Super Bowl I which was the first game of NFL Super Bowl was played and in the year 2010, Super Bowl XLIV which will be the next game of NFL Super Bowl will be played.

This time the NFL Super Bowl will be played in Landshark stadium of Miami. In the past years, the Landshark stadium has organized many football events in which four were Super Bowls and two were World Series. In 2010, Landshark stadium will be hosting the NFL Super Bowl for the fifth time and this Super Bowl event will be the ninth for the whole Miami area.

Super Bowl XLIV event will officially begin on February 7, 2010. Super Bowl XLIV will make Florida a busy state because of the fans coming to the Landshark stadium to watch this game live. The hotels, restaurants and inns are all prepared to entertain fans and tourists. The Landshark stadium has also been prepared for this day with the seating capacity of atleast 65,000 fans. Cheap Super Bowl XLIV tickets are now on sale for the game to be held on February 7, 2010 in Miami Florida for providing promo code ” 44 ” at checkout on TicketsGenie.com to get 5% off your Super Bowl 44 tickets.

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Super vs Investment Property

If you are planning to invest, you may have asked yourself ?Should I put the money into super, or am I better off buying an investment property?? Colonial First State weighs up the options.

Family Trusts can now pay Superannuation to its directors