Section 1031 and Vacation Homes

Whether you call it another tax benefit for the wealthy or help for strapped real-estate investors, it’s worth taking note that the IRS has recently clarified their position on swapping vacation homes – you can do it now tax free.

There are the usual rules that specific times, percentages and percentages of time are required to qualify but what it boils down to is that chances are owners of multiple homes now have other way of transferring assets without having to get the tax man involved.

It’s May Fifteenth, Do You Know Where Your Rebate Check Is?

I only ask because the IRS has been sending the rebates to the wrong taxpayers. And it’s not just checks but direct deposits, too. 15,000 by one estimate.

I’ll give you a moment to let that sink in…



Why is this happening? The agency doesn’t really know, says IRS spokesman Kevin McKeon. But if the rebate schedule says that you should have already received your then McKeon suggests you visit IRS.gov or call the toll-free service Refund Hotline at 800-829-1954.

Oh, and if you happen to receive some else’s rebate the IRS would very much like it if you would please return it.

Sheesh!!!!

Pastors Giving the IRS the One-Fingered Salute

They've had enough and now they're fighting back. Pastors across the US feel that the ban against partisan political rhetoric from the pulpit violates their First Amendment civil right to free speech. Since 1954 the IRS has seen it differently: if churches wish to continue to enjoy their tax-free status they should keep their mouths shut during election season. The pastors argue that other non-profits are able to take political positions and so should they.

So later this year the pastors plan to coordinate a day of protest when they will collectively voice their political views. Watch for it, coming to a church near you on Sunday, September 28.

The IRS maintains that anyone violating this rule will face financial penalties to loss of tax-exempt status.

Who's right? I have no idea but it will be fun to watch!

US Government Acknowledges Tax Credits Are Confusing and Difficult

This is one of those bits of news that engenders two distinct and seemingly incongruous reactions. The first is, "Well, duh!" Of course understanding and complying with the IRS vast number of rules and regulations. The other reaction is complete amazement that the tax collecting agency is actually acknowledging that the directions and regulations for at least one particular tax credit are confusing and could have bee presented in a clearer way.

The credit in question is the Hybrid Vehicle Tax Credit. The credit, which is designed to defray some of the cost of the more expensive hybrid technology and encourage growth of the industry, is different for each model and year of production and reduces each year of ownership. Also, neither the dealership that sells the car nor the manufacturer are obligated to provide the taxpayer with any information leaving up to her to research and determine the amount of the credit.

It's easy to see how this whole mess could get confusing. And the Treasury Inspector General for Tax Administration recently did a study where it was determined that the IRS might have done a better job setting the whole thing up. You can read all about it in the report The Complexity of the Law Makes Administering the Alternative Motor Vehicle Credit Difficult.

No Tax Rebate for Foreigners...or Their Spouses

Full Disclosure: I have a personal interest in this one as it directly affects my sister and her Ghanaian husband. They've been married for three and a half years and have two kids. While they wait for the interminable process of immigration to play out my brother-in-law works hard at three, yes three, jobs. He works seven days a week, all hours of the day and never complains. In fact he never seems to stop smiling. My sister works a full time job and they are raising four wonderful kids.

But for some reason the IRS decided that my brother-in-law doesn't deserve the stimulus/rebate check. Why, exactly, that is I can't fathom. It seems that it would be rather easy to check the records and see that he's worked steadily and contributed more than his fair share to society not to mention the tax coffers and deserves the rebate just as much as anyone.

But to add injury to injury it's now come out that my sister will likely be excluded from the payoff as well. I really don't know if they file jointly or not but if they do then neither one will receive their check.

Interestingly one of the groups of US citizens this greatly affects is members of the military who married foreign nationals while stationed abroad. While individuals in the government like to trumpet their support for the troops this is yet another example of policy saying otherwise.