Speaking to a crowd of real estate professionals in his hometown, Cantor said the tax would be considered as part of the larger tax reform discussion. But he suggested a change is probably not in the cards. “Honestly, there’s not a lot of support for getting rid of the mortgage deduction on Capitol Hill,” Cantor said to loud applause from the audience. Cantor was speaking to nearly 200 members of the Richmond Association of REALTORs. [The Hill]
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Tax Day Means Paying Very Little for a Fast Food Feast
- Caleb Newquist
- April 17, 2012
It's finally tax day, which calls for celebration. If you're a tax professional, this means […]
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Top 10 Tax Changes to Know Now
- Caleb Newquist
- November 16, 2010
In March 2010, the President approved two huge pieces of tax legislation: the Hiring Incentives to Restore Employment Act and the Patient Protection and Affordable Care Act. Numerous tax provisions from these two bills take effect over the next several years. Will you be able to identify the tax changes that may impact your clients’ tax returns? Here’s a quick list of the things you will want to be familiar with.
1. Tax timeline in the health care reform act—when each provision takes effect. These are major tax changes spread over the next 8 years!
2. The additional Medicare Tax on unearned income and wages found in the new Health Bill (the hottest tax topic of the year)
3. How the Gillet case affects the tax return of a same-sex couple. Is filing “Married Filing Joint” permitted?
4. The 5 tests for qualifying a child as a dependent and who can claim the child after a divorce.
5. The new rules for basis reporting starting in 2011 (Form 1099-B).
6. Cancellation of debt (and exceptions to COD Income (Section 108).
7. The myriad adjustments to gross income such as health savings accounts and prepaid tuition accounts.
8. Changes to itemized deductions including the new charitable contribution rules, the home mortgage rules and medical expenses.
9. Features and effective dates for the American Opportunity Tax Credit (Hope Credit) and the Lifetime Learning Credit.
10. The over 60 provisions that expire at the end of 2010; Ordinary income tax rates, capital gains rates, EIC, child tax credit, dependent care credit, limit on itemized deductions and exemptions, etc. will all revert to 2001 law.
Need help pulling all the information together? Get the details on these and other issues related to individual income taxes in Part 1 of CPE Link’s Federal Tax Update webcasts scheduled November-January. Course includes 120 page downloadable manual containing hyperlinks to applicable code sections.
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The Latest Homebuyer Tax Credit Scam: Now with HUD!
- Joe Kristan
- March 12, 2010
That the First-time Homebuyers Credit is riddled with fraud is old news. Like all refundable credits, where the government writes you a check if the credit exceeds the tax shown on your return, it’s a magnet for grifters. What’s new is cross-agency efforts enable First-Time Homebuyer Credit fraud, with video.
James O’Keefe, notorious for donning pimpwear and taping ACORN officials happily facilitating tax fraud and child prostitution, and then for getting arrested in Louisiana, took his act to Detroit and Chicago offices of the U.S. Department of Housing and Urban Development posing as a tax credit scammer. One conversation went like this:
The law says that the tax credit maxes out at $8,000 for an $80,000 home. On the tape, O’Keefe asked a staffer, “What if I bought a place for $50,000, but the seller and I agreed to write down $80,000 as the purchase price?”
“Flip it any way you want,” the staffer replied.
What if the place is worth much less — like only $6,000?
“Yup, you can do that.”
This version of the Homebuyer Credit scam can get around the checks the IRS has in place to prevent fraud. The primary IRS anti-fraud check for the homebuyer credit is a requirement that a copy of an HUD-1 form or settlement statement be attached to the 1040 claiming the credit. If the buyer and seller collude to dummy up a HUD-1 form, the “buyer” is reasonably likely to get the credit as long as there isn’t some other item on the return that flags it – such as an address that’s different from the one for the “home” on the settlement statement.
The scammers wouldn’t be out of the woods by any means. The IRS might well catch up with the scammers. But then again, they might not, or if they did, the money could be long gone. For someone living in in a Detroit neighborhood where houses sell for as little as $1,000, splitting $8,000 with a scammer might be one of the less-risky opportunities at hand.