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Posts Tagged ‘tax’

Credit Suisse sued $26bn over resorts

PROPERTY owners at four luxury ski and golf resorts are suing Credit Suisse for $26 billion over accusations of a “loan-to-own” plan.

Las Vegas Debt Settlement

Question: If I received notice of a tax debt due by the IRS, which gives me 30 days to dispute or setup installment plan?

for the debt, will my current year income tax refund be witheld? I am expecting a much bigger return back than what the IRS is saying I owe and I had already sent my return in for e-filing through an online tax preparer site. So, will I get a rejection notice from the IRS for my current return or will they just deduct the amount they are saying I owe, then direct deposit the remainder into my acct?

Answer: They will deduct the amount you owe and refund you the rest.

State Tax Revenue in U.S. Drops Most Since 1963, Study Says

Jan. 7 (Bloomberg) -- U.S. state tax collections fell the most in 46 years in the first three quarters of 2009 as the recession shrank revenue from sources including personal income, the Nelson A. Rockefeller Institute of Government said.

Income Tax Debt Help

Question: Who pays the interest on our spiraling national debt? Is this why bank credit card rates are so uxorious?

The current Yahoo discussion about the evils of credit cards, while good, needs to see the bigger picture, and the relation of politics to credit, of the Iraq War to your Visa card. Who pays the interest on our loans of trillions of dollars? Doesn’t income tax largely support present government programs? If so, isn’t the federal government borrowing heavily from the banking system for much of our lavish expenditures? And if the banks start defaulting on the loans, what happens to America and its government? The consumer may cry out for government regulations of credit card abuses, but why should he expect the government to shoot itself in the foot, inflicting further self-damage?

Answer: No no no, government fiscal deficits and debt are not directly related to credit cards or bank loans or consumer interest rates. The government does not borrow from banks like consumers and businesses do. Your question is good but also jam-packed with misconceptions.

OK, The Federal Gov't does have a debt that it pays interest on. Cash interest is one of the budget items Gov't spends money on each year. Gov't gets its revenue from taxing people and corporations. When that is not enough (it usually isn't), then the Gov't borrows money by selling Treasury Bonds at public auctions. You yourself can buy one one these bonds and thereby be a lender to the Gov't; anyone can.

It is NOT true that most of the debt is held by the Chinese and Japanese. The Treasury Dept. regularly reports on the distribution in ownership of US Bonds, and the large majority are held by American people and entities. The Japanese and Chinese together hold about 13% of it, last I saw.

So Gov't is borrowing, but not directly from banks. It borrows from a wide variety of people, corporations, mutual funds -- whoever is there to buy bonds at auction.

The government is actually not borrowing "heavily". Currently the deficit is running at about 1.3% of the U.S. GDP, and the deficit has been declining each year for several years. That is considered quite frugal and easily manageable by modern standards. Key point: what matters is not the absolute dollar amount of the deficit, but its size compared with the overall economy. (Because Gov't derives all of its revenue from the private economy). The U.S. has a huge economy and huge tax receipts, as well as a huge budget and a deficit that may look huge to you.

Since it is not banks that pay the interest on the national debt or redeem Treasury bonds that come due, then it is nonsensical to talk of *banks* defaulting on those loans. It is the Federal Gov't who pays those bills, and there is almost zero chance of the Federal Gov't defaulting. Actually, there is literally no reason for the Gov't ever to be forced to default -- the Gov't can ONLY "default" if for some political reason Congress refused to authorize funds to make those payments. (And even they aren't THAT stupid).

Finally, you should understand that Gov't deficits actually help to relieve consumer debt. Because the alternative to deficit spending for a given budget is raising taxes. And if individuals faced higher taxes, they'd have less after-tax money to meet their needs or pay their existing debts. How does making you pay higher taxes help you pay off your credit card bill? It doesn't. It hurts.

The big picture is that we as a society have shifted much deficit spending and debt from consumers (who have to pay high interest rates and who can go bankrupt) to the Federal Government (which gets low interest rates and cannot go bankrupt).

Beginning of the End For Economic Rescue

Federal regulators will find getting out is much trickier than jumping in.

United States Economy Collapsing

Question: If I buy a house as an investment, hold it one year, and then sell it for a loss, what’s the tax treatment?

Extra Info: The home was purchased with a mortgage loan secured by me personally, and because it was a short sale, I got a 1099-C Cancellation of Debt for the amount of my loss; though the loan was for the full purchase price. I also paid interest on the loan, property taxes, and insurance. Can all this be self-employment income, which would show a loss for the year? That’d be the easiest thing for me.

Or if not, where would I enter that, and does the amount of my loss offset the debt cancellation income? And if so, how would I deduct my expenses? Any help would be nice, as I looked all over the IRS website and can’t find anything.

Answer: This is a facts and circumstances thing.

You have to show that this *wasn't* a second home. If you ever used it personally, it won't qualify as investment property.

If you do not regulary flip houses, it would be an investment. Investment interest flows through form 4952 to schedule A. Investment taxes go to schedule A. Gain/Loss goes on schedule D.

if you regularly flipped houses, this would be a schedule C.

Fitch Expects to Rate Beazer's $50MM Mandatory Convertible Sub Notes 'C/RR6'; Outlook to Stable

NEW YORK----Fitch Ratings expects to assign a 'C/RR6' rating to Beazer Homes USA, Inc.'s proposed offering of $50 million 7.5% mandatory convertible subordinated notes due 2013. The notes issuance will rank junior to all of the company's existing and future senior notes and will rank ahead of the company's $103 million junior subordinated notes.

Tax Relief for Foreclosed Homeowners - IRS Cancellation of Debt Income

Question: 1099C Cancellation of debt?

I sold a house on a short sale – Iowa. The bank accepted $38,500. I got a 1099C for $46,000 Cancellation of Debt. I was not insolvent. I moved to accept a job and had to sell the house I owned. I sold it on a short sale because the pipes burst and the cost to repair was about $5000. I bought another house in a different city. Wouldn’t the amount of debt cancelled be the difference between the $38,500 and $46,000? I was also part of the Flood of 2008 and suffered losses. Any advice – I do have a CPA figuring my taxes at a cost of $400!!!! The house I sold was an FHA home.
I sold the house for 38,500 and only owed 47,000! Why am I not on the hook as you say for only the difference. It didn’t make sense for me to pay for the repairs when I had already bought another home. I didn’t need a smart ass answer!!!

Answer: The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

More information, including detailed examples can be found in Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments. Also see IRS news release IR-2008-17.

MORE: One possible reason why you got a 1099-C for $46,000 is that it may have cost the bank $38,000 or more in administrative and other costs to complete the sale. They may be charging you additional fees, as well. Did you receive an itemized statement from the bank or closing company at any time following the sale?

Britain in grip of coldest winter for 30 years

Britain remained in the grip of the coldest winter for more than 30 years today, with conditions set to feel even more icy in the coming days.

Cancelled Debt Tax Tips - Jackson Hewitt