Tax notes from Sundahl Financial

Deducting 529 Plan Losses
Thanks to their beneficial tax treatment, qualified tuition programs (QTPs—commonly referred to as 529 plans) have become the plan of choice for many taxpayers trying to save enough money to cover the ever-escalating costs of getting their child or grandchild through college.
Standard Mileage Rates for 2009
Beginning January 1, 2009, the standard mileage rates for the use of an automobile (including vans, pickups, or panel trucks) are 55 cents per mile for business miles, 24 cents per mile for medical or moving purposes, and 14 cents per mile for service to a charitable organization.
Purchase of a Taxpayer's Home by an Employer
Sometimes, when an employee is transferred to a new location, the employer will purchase his or her home. The amount paid can be fair market value (FMV) as established by appraisals, a guaranteed percentage of the employee’s cost basis in the home if the appraisal is less than the basis, or any other amount agreed to.
Repossessing Real Estate Sold on the Installment Basis
Recognizing real estate sales gains using the installment method is a popular way to defer taxation when seller-financing is provided.

Tax Credit for Homebuyers

Signed and sealed…a $787 Billion Stimulus Plan made up of tax cuts and spending programs aims at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II. Home owners and potential homebuyers stand to gain from key provisions in this stimulus plan.
Here is what we know as of today: first-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. The 2008 credit-interest free loan is not taxable income. However, it is repaid as additional tax. The 2009 credit is not taxable. In the event the taxpayer disposes of the principal residence in 36 months, the recapture rules of the 2008 law will apply—it becomes an interest free loan to be repaid.
(Submitted by Rose Kelly, Sales Manager, Universal Lending Corp.)

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