[OT] US Tax help???

I know there are a few people on the group who do taxes for a living and I'm
scrounging for some free advice.

I mentioned in another post that my ex has finally agreed to sign over his
half of the house to my daughter, and I'm going to do the same.

What I didn't consider, however, is that there may be a "gift tax" that I'll
be liable for. I think that it's for anything donated that's worth over
$11,000 the donor will be taxed.

Would it be worthwhile for me to get an appraisal on the house in its
current disaster state? Does the tax still apply if it's to my daughter -
who's also a Katrina victim???

Last year we had to take out a two-year loan to pay our taxes because we
mis-calculated how much to keep out in taxes when we had to take out our IRA
funds. I don't want to be in the same boat this year so would appreciate
any "heads up" anyone can give me.

Hugs,

CatNipped

On Wed, 09 Nov 2005 17:50:07 +0100, Nomen Nescio wrote:

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From: "CatNipped"

I know there are a few people on the group who do taxes for a living and
I'm scrounging for some free advice.

I mentioned in another post that my ex has finally agreed to sign over
his half of the house to my daughter, and I'm going to do the same.

What I didn't consider, however, is that there may be a "gift tax" that
I'll be liable for. I think that it's for anything donated that's worth
over $11,000 the donor will be taxed.

Well, I'm not an accountant, but........... (sparing you a lame "Holiday
Inn" joke) I did take a couple semesters of accounting.

I believe you and your ex can each gift 11k for a total of 22k untaxed.

Would it be worthwhile for me to get an appraisal on the house in its
current disaster state?

Yes. The gift value is the current value of the property. I believe you
can itemize a deduction for a casualty loss (the IRS still allows that,
don't they?) for 1/2 the property value before the damage less 1/2 the
value after the damage (with certain income restrictions).

Does the tax still apply if it's to my daughter - who's also a Katrina
victim???

I think so.

It would be worth your while to talk to an accountant since it can get
kinda complex.
Maybe instead of a gift, you can sell it to her for a buck.

Best of luck.


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I don't understand the details, but there is a lifetime exemption in there
somewhere. Talk to a certified accountant. MLB

"CatNipped" wrote in message
...
I know there are a few people on the group who do taxes for a living and
I'm
scrounging for some free advice.

I mentioned in another post that my ex has finally agreed to sign over his
half of the house to my daughter, and I'm going to do the same.

What I didn't consider, however, is that there may be a "gift tax" that
I'll
be liable for. I think that it's for anything donated that's worth over
$11,000 the donor will be taxed.

Would it be worthwhile for me to get an appraisal on the house in its
current disaster state? Does the tax still apply if it's to my daughter -
who's also a Katrina victim???

Last year we had to take out a two-year loan to pay our taxes because we
mis-calculated how much to keep out in taxes when we had to take out our
IRA
funds. I don't want to be in the same boat this year so would appreciate
any "heads up" anyone can give me.

Hugs,

CatNipped



I'm a CPA. A gift of less than $11,000 would not be taxed. Any amount
over $11,000 would come out of your $1,000,000 lifetime exclusion before it
would be taxed.

I would still be a good idea to get an appraisal of the post Katrina, pre
cleanup value of the property. Just because it is so much easier to do now
rather than later.

Then you get into the part where you and your spouse can make a joint gift
to your daughter of $11,000 each and that boosts it to $22,000 before you
are supposed to file a tax return. It you make the gift to her and to her
husband then you are up to $44,000. Doesn't really matter that it all
belongs to you and not your spouse. But for these scenarios you do need to
file form 709. Just to put what you are doing on the record.

You need to download form 709 and Publication 950 from the IRS website and
try to wade through what applies to you.

http://tinyurl.com/dxnhk

http://tinyurl.com/9olsn


Then for a little more light reading download

http://tinyurl.com/bbz2v

It tries to explain what you can deduct for your losses from Katrina. You
might even be able to deduct the loss on your 2004 tax return.

Disaster losses are outside my area of expertise, but I'm guessing plenty of
accountants in your area are adding it to theirs right now.

You would have a loss of 1/2 of the value of the home before Katrina less
1/2 of the value after. Your daughter's family will have a huge loss on
personal property from the pictures I saw.

Jo

"Jo Firey" wrote in message
...

"CatNipped" wrote in message
...
I know there are a few people on the group who do taxes for a living and
I'm
scrounging for some free advice.

I mentioned in another post that my ex has finally agreed to sign over
his
half of the house to my daughter, and I'm going to do the same.

What I didn't consider, however, is that there may be a "gift tax" that
I'll
be liable for. I think that it's for anything donated that's worth over
$11,000 the donor will be taxed.

Would it be worthwhile for me to get an appraisal on the house in its
current disaster state? Does the tax still apply if it's to my
daughter -
who's also a Katrina victim???

Last year we had to take out a two-year loan to pay our taxes because we
mis-calculated how much to keep out in taxes when we had to take out our
IRA
funds. I don't want to be in the same boat this year so would
appreciate
any "heads up" anyone can give me.

Hugs,

CatNipped



I'm a CPA. A gift of less than $11,000 would not be taxed. Any amount
over $11,000 would come out of your $1,000,000 lifetime exclusion before
it
would be taxed.

I would still be a good idea to get an appraisal of the post Katrina, pre
cleanup value of the property. Just because it is so much easier to do
now
rather than later.

Then you get into the part where you and your spouse can make a joint gift
to your daughter of $11,000 each and that boosts it to $22,000 before you
are supposed to file a tax return. It you make the gift to her and to her
husband then you are up to $44,000. Doesn't really matter that it all
belongs to you and not your spouse. But for these scenarios you do need
to
file form 709. Just to put what you are doing on the record.

You need to download form 709 and Publication 950 from the IRS website and
try to wade through what applies to you.

http://tinyurl.com/dxnhk

http://tinyurl.com/9olsn


Then for a little more light reading download

http://tinyurl.com/bbz2v

It tries to explain what you can deduct for your losses from Katrina. You
might even be able to deduct the loss on your 2004 tax return.

Disaster losses are outside my area of expertise, but I'm guessing plenty
of
accountants in your area are adding it to theirs right now.

You would have a loss of 1/2 of the value of the home before Katrina less
1/2 of the value after. Your daughter's family will have a huge loss on
personal property from the pictures I saw.

Jo

Thanks Jo! I had downloaded the form 709 before I found out about the
$1,000,000 lifetime exemption and when I saw that it taxed the donation
amount at 48% I almost had a heart attack!!!

DH said that I will have to get my ex husband to sign the form 709???!
Maybe that is only if we do the joint gift thing???

We signed and notarized the donation papers today (I was going to do it even
if I had to pay the taxes), but we are still going to get the house
appraised before it is repaired (we should have done it before they cleaned
out the house and stripped off the moldy sheetrock - the appraiser would
have gotten a different picture than the clean-looking result now!).

Katrina victims are going to get back the last 3 years of income taxes that
they'd paid (and I would think they wouldn't have to pay taxes for 2005
either, or else claim the losses for a bigger refund??).

I also found out that people who are housing Katrina will get a $500 per
person exemption, to a maximum of $2,000, off of their 2005 taxes. That
will help me out a little (utility bills at my house have quadrupled in the
last 2 months!!!). FEMA won't help out the "hosts" because they say that
the monthly allowance they're giving Katrina victims should be spent on "ren
t" to their hosts - but I won't take any money from them because my daughter
will need every penny she can find to rebuild and to re-buy everything they
owned.

Hugs,

CatNipped

Cat you also need to check with your state they have disaster relief
exceptions My tax attorney did not even know about them till I asked each
state is doing something different

"CatNipped" wrote in message
...
Thanks Jo! I had downloaded the form 709 before I found out about the
$1,000,000 lifetime exemption and when I saw that it taxed the donation
amount at 48% I almost had a heart attack!!!

DH said that I will have to get my ex husband to sign the form 709???!
Maybe that is only if we do the joint gift thing???

Nope. Your ex can take a flying whatever you like.

DH is only signing to acknowledge that he is letting you use his $11,000 in
regard to a possible gift to your daughter and won't be taking it himself.

In effect the two of you could give $44,000 to your daughter and her DH with
out it touching your lifetime exclusion.

Jo

"Jo Firey" wrote in message
...

"CatNipped" wrote in message
...
Thanks Jo! I had downloaded the form 709 before I found out about the
$1,000,000 lifetime exemption and when I saw that it taxed the donation
amount at 48% I almost had a heart attack!!!

DH said that I will have to get my ex husband to sign the form 709???!
Maybe that is only if we do the joint gift thing???

Nope. Your ex can take a flying whatever you like.

DH is only signing to acknowledge that he is letting you use his $11,000
in
regard to a possible gift to your daughter and won't be taking it himself.

In effect the two of you could give $44,000 to your daughter and her DH
with
out it touching your lifetime exclusion.

Jo

AH! Kewl - *THANKS*, that's *very* helpful info!

Hugs,

CatNipped

"CatNipped" wrote in message
...
We signed and notarized the donation papers today (I was going to do it
even
if I had to pay the taxes), but we are still going to get the house
appraised before it is repaired (we should have done it before they
cleaned
out the house and stripped off the moldy sheetrock - the appraiser would
have gotten a different picture than the clean-looking result now!).


You need to establish what it was worth right before Katrina, and right
after. Picture should be a big help. But get a valid appraisal.


Katrina victims are going to get back the last 3 years of income taxes
that
they'd paid (and I would think they wouldn't have to pay taxes for 2005
either, or else claim the losses for a bigger refund??).

Not saying this isn't true, but it doesn't sound like income taxes as I know
them. At least not federal. Maybe Louisiana, but then I can't see how they
could afford it. Probably the potential for a disaster loss being large
enough to general a Net Operating Loss Carryback that could wipe out prior
years taxes is being reported to sound this way.



I also found out that people who are housing Katrina will get a $500 per
person exemption, to a maximum of $2,000, off of their 2005 taxes. That
will help me out a little (utility bills at my house have quadrupled in
the
last 2 months!!!). FEMA won't help out the "hosts" because they say that
the monthly allowance they're giving Katrina victims should be spent on
"ren
t" to their hosts - but I won't take any money from them because my
daughter
will need every penny she can find to rebuild and to re-buy everything
they
owned.



Sort of true. You would likely get a $500 per person exemption for your
daughter and her kids, but that would only translate to that amount times
your marginal tax rate off your taxes. $2000 time 15% or maybe 28%.

For really fun light reading

http://tinyurl.com/ahhef


Great as a cure for insomnia if nothing else.

Jo

CatNipped wrote:
I know there are a few people on the group who do taxes for a living and I'm
scrounging for some free advice.

I work for a CPA firm, although I know nothing about the tax
consequences of a situation such as you describe. I really
think you should consult a CPA or attorney, just to be sure.
(Not all of them charge an arm and a leg for simple
advice, and in the long run it's less expensive than finding
out the hard way that you've made a costly mistake.)

On Wed, 09 Nov 2005 17:34:35 +0000, mlbriggs wrote:

On Wed, 09 Nov 2005 17:50:07 +0100, Nomen Nescio wrote:

-----BEGIN PGP SIGNED MESSAGE-----

From: "CatNipped"

I know there are a few people on the group who do taxes for a living and
I'm scrounging for some free advice.

I mentioned in another post that my ex has finally agreed to sign over
his half of the house to my daughter, and I'm going to do the same.

What I didn't consider, however, is that there may be a "gift tax" that
I'll be liable for. I think that it's for anything donated that's worth
over $11,000 the donor will be taxed.

Well, I'm not an accountant, but........... (sparing you a lame "Holiday
Inn" joke) I did take a couple semesters of accounting.

I believe you and your ex can each gift 11k for a total of 22k untaxed.

Would it be worthwhile for me to get an appraisal on the house in its
current disaster state?

Yes. The gift value is the current value of the property. I believe you
can itemize a deduction for a casualty loss (the IRS still allows that,
don't they?) for 1/2 the property value before the damage less 1/2 the
value after the damage (with certain income restrictions).

Does the tax still apply if it's to my daughter - who's also a Katrina
victim???

I think so.

It would be worth your while to talk to an accountant since it can get
kinda complex.
Maybe instead of a gift, you can sell it to her for a buck.

Best of luck.


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I don't understand the details, but there is a lifetime exemption in there
somewhere. Talk to a certified accountant. MLB


Sorry folks. I was trying to eliminate the "stored" messages. MLB