Comments on: Expert advice: Tax breaks on your house

By: david

david — Mon, 13 Apr 2009 19:26:26 +0000

My comment for Adele is to stop in and see a CPA. The facts here might need to be explored a little more to see if you are required to file in two states or not. One can always file an amended return and claim a refund if they are entitled to it. Form 1040X (amended return)must be filed within 3 years from the date of your original return or within 2 years from the date you paid the tax, whichever is later. Returns filed before the due date (without regard to extensions) are considered filed on the due date.

By: Adele Peterson

Adele Peterson — Wed, 08 Apr 2009 21:02:49 +0000

I was hoping you could clarify something for me. My children have irrevocable trusts (created in Oklahoma for rental income) that their grandfather set up for them. They have K-1’s they get each year which go on their EIN numbers. The trust is set up so they each get 1/3 when they are 25, 2/3 when they are 30, and the remainder when they turn 35. Each trust earns around $5800 a year and the money that is distributed is put in a trust bank account. My children are 17, 14, 12, and 8. I discovered last year that I am most likely filing incorrectly every year that the children have been alive. My accountant has filed every year on a 1040 using their SS numbers. Instead, they should be filing on a 1041 with the trusts EIN number. It is my understanding that they should have been paying a trust rate of 28% for all these years instead of their parents 33% and higher rate. They also pay state tax in Oklahoma and Minnesota for the trust income. All of this income is earned in Oklahoma.
Can I only go back to 2005 to amend and will I be penalized for not filing on the correct form even though I have overpaid on the 1040? Also, does the trust pay Oklahoma and Minnesota or just Minnesota?

By: David Bergstein

David Bergstein — Fri, 03 Apr 2009 13:56:54 +0000

John, thank you for your careful reading. The first-time homebuyer credit for a home purchased in 2009 can be taken on either the 2008 or 2009 tax return. For homes purchased in 2009, the requirement for claiming the credit on a 2008 tax return is that the home is purchased after December 31, 2008 and before December 1, 2009.

By: John

John — Thu, 02 Apr 2009 16:52:10 +0000

David
I think your answer to Kode’s question is not totally correct.
For homes purchased in 2009, you can elect to claim tax deduction on either 2008 return or 2009 tax return. You do not need to buy the house before July 1st,2009 to do that. You can elect to claim your deduction on 2008 if you buy the house between Jan 1st 09 and Dec 1st 09. . Please check your answer again.

By: Ryan

Ryan — Wed, 01 Apr 2009 06:12:29 +0000

Thanks for the answer. Really appreciate it and thanks Ramit for setting this up.

By: Sarah

Sarah — Tue, 31 Mar 2009 21:58:07 +0000

I own a two-bedroom condo and rent out one room to a tenant/roommate. Can I still deduct mortgage interest and property tax? What about the condo fee and home improvements that are generally deductible for rental properties, as well as depreciation?