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Tax Strategy for the Week (December 20th, 2013)

Fun Asia Show Recording-December 19, 2013
Transfers to Charity at Death
Tax Issue

A gift to charity at death is deductible for estate tax but generally not for income tax. Lifetime gifts to charity, on the other hand, reduce the taxable estate and also provide an income tax deduction. The problem with a sizable lifetime charitable gift, however, is that it may leave the donor uncertain about their future financial security. The safest course is to wait until death to be sure that the money will not be needed.

 

Applicable Tax Law

Most gifts to charity, regardless of the amount, are fully deductible for […]

Tax Strategy for the Week # 2 (November 22nd, 2013)

Fun Asia Show Recording-November 21, 2013
Cost Segregation – How It Can Save Tax
Tax Issue

Taxpayers who acquire real property for use in their business are faced with depreciating real property over 27.5 or 39 years. Certain costs incurred in constructing or acquiring real property often qualify for accelerated depreciation. The ability to shorten the depreciation period can substantially decrease the tax liability of a business and increase its cash flow. It is important to have documentation supporting the reclassification of building components to tangible personal property depreciable over shorter periods.

Applicable Tax Law

Buildings (section 1250 property) are generally eligible for straight-line […]

Tax Strategy for the Week (October 18th, 2013)

Does it Make Sense to Refinance a Mortgage?
 
Tax Issue

The chance to refinance a mortgage and get a lower interest rate is sure to get a homeowners’s attention. Most people assume that refinancing will put them ahead economically, but that’s not always the case. Any number of situations can arise which will make the decision to refinance unwise. Refinancing a mortgage should be done with just as much care as was put into the decision to obtain the original mortgage. Sometimes a mortgage refinance makes sense. Other times, it is better to stay with the current arrangement.

Applicable Tax Law

Home mortgage […]

Tax Strategy for the Week (September 6, 2013)

Does it Make Sense to Refinance a Mortgage?
 
Tax Issue

The chance to refinance a mortgage and get a lower interest rate is sure to get a homeowners’s attention. Most people assume that refinancing will put them ahead economically, but that’s not always the case. Any number of situations can arise which will make the decision to refinance unwise. Refinancing a mortgage should be done with just as much care as was put into the decision to obtain the original mortgage. Sometimes a mortgage refinance makes sense. Other times, it is better to stay with the current arrangement.

Applicable Tax Law

Home mortgage […]

Tax Strategy for the Week (August 30th, 2013)

First Time Homebuyer – Deducting Points
 
Tax Issue

 

Points paid to purchase a home are fully deductible in the year paid if the loan meets certain criteria. However, first-time homebuyers who purchase a residence late in the year often find they do not have enough mortgage interest or property taxes accumulated to benefit from itemizing deductions. The deduction for points paid on the purchase of their home may be lost.

 

Applicable Tax Law

 

For points to be deductible, the loan must be secured by the taxpayer’s main home, paying points must be an established business practice in the area, the points paid most […]

Tax Strategy for the Week (August 22nd,2013)

First Time Homebuyer – Buy or Rent?
 
Tax Issue

Home ownership is a dream of many Americans. Whether it is economically more beneficial to rent or buy depends on many variables, including whether home values are rising or falling, how long the individual plans to stay in one location, and whether or not the individual is willing to take on the responsibility of maintaining the upkeep on a home. However, the tax benefits available to homeowners can provide significant savings. The advantages of owning or renting are different for everyone so each individual’s situation needs to be evaluated before making the […]

Tax Strategy for the Week (August 9th, 2013)

Low Income Housing Tax Credits
 
Tax Issue

Many taxpayers are aware of tax benefits of investing in real estate. Taxpayers can create a tax loss be depreciating the property. However, the loss on rental real estate is limited to $25,000 per year ($12,500 for Married Filing Separately). This loss is then phased out for taxpayers with modified AGI of more than $100,000.

 

The phaseout of the losses can be problematic for taxpayers affected by this. The benefits of investing in real estate are lessened.

 

Applicable Tax Law

 The Department of Treasury issues tax credits to the states for low-income housing developments. State agencies then […]