A lot of parents are very reluctant to share their financial history. They might have a wonderful relationship with their children emotionally, but when it comes to finances, not too many are always ready to talk about that. |
Always file your tax return on time, even if you don't have the money. The biggest penalty is late filing. |
He's going to lose on eight of them, because he's past the three-year statute. |
I don't want to sound sexist, but it happens a lot. The husband is working off the books and the wife calls the IRS. |
I would encourage the children to be open. Ask your parents in general terms if they want some help discussing it, or in setting up a meeting to talk about it with a professional. |
It can't be like a babysitting situation. |
It used to be much more advantageous prior to the change (in 1993). There's been a lot more tightening. |
One of the biggest problems I see these days is when the children feel they have a right to an inheritance and a lot of times [they want to intervene on their parent's financial behalf] before they are ready and willing to do that. I know a lot of lawyers who say the first thing they do is take the parents into a room and ask them if they are ready for this. |
Previously, someone like a plumber, who may have run his office from home and had a secretary there, could not take this deduction because he provided goods and services outside the home. Of course, the IRS realized the inequity there and changed the rules. |
Record-keeping is important. Document everything you do. |
That's a winner all the way around. |
The IRS will hold back a part of a refund if the two names don't match. |
The new rule is much more friendly to taxpayers. Only sales of more than $500,000 for married couples and $250,000 for single people have to be reported. So you don't need to keep records unless you think you home may sell for more than that amount. |
The rate at which the profit is taxed depends on whether or not the property depreciated in value. |
There will some unpleasant surprises and a sense of loss among single parents who have adult children living with them when they file this year. |