| My wife is permanently disabled and we are considering a $23,000 home elevator. If my
father pays for if, can he deduct the expense subject to 7.5% AGI (the medical expense
limitation)? [an error occurred while processing this directive] Your father may gift more than $11,000/yr. if the additional amounts are for
medical purposes as set forth in the tax code. An elevator can be a medical expense under
certain circumstances. It would be better for your father to gift the money to you so that
you could purchase the elevator. You would have a claim that you incurred a medical
expense as an itemized deduction to the extent the cost outweighs the increase in value to
your home. The cost of installing an elevator to assist a taxpayer with a heart ailment is
a medical expense to the extent the cost of the elevator is higher than the increase in
value of the home. For instance, if the elevator costs $23,000 and by virtue of having an
elevator, the home's value increases by $15,000, then $8,000 qualifies as a medical
expense. [an error occurred while processing this directive] The Tax Prophet's on Real
Estate Taxation [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] My father recently died and now my 76 year old
mother has received a $900,000 offer for their long-time George residence. What happens if
she sells? [an error occurred while processing this directive] Unfortunately, your mother cannot carry forward her husband's share of the
residential exemption. Thus, your mother may exclude $250,000 in profits, the maximum
exclusion for a single person. An installment sale does not increase the residential
exemption, but could lessen the taxes paid each year, depending on your mother's tax
bracket. Planning Note: Be sure to properly calculate your mother's adjusted basis in the
property. If she received the property from her husband or held it as "marital or
community" property under the laws of Georgia, the basis in the property could have
received a substantial basis "step-up" upon the death of your father. [an error occurred while processing this directive] The Tax
Prophet's Tax Class on Residence [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] If I overpay my federal taxes, is there a penalty? [an error occurred while processing this directive] There is no penalty for
overpaying your federal taxes. You are entitled to a refund of the overpayment or you may
apply the overpayment to next year's taxes. If you overpay your state taxes and deduct
state taxes as an itemized deduction, any refund received by your state is considered
income for federal tax purposes in the following year. [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] I am a U.S.
citizen living in Greece married to a Greek citizen. I earn $3,000 in interest and
dividends. Do I file a U.S. tax return and if so, do I have to report my husband's
earnings? [an error occurred while processing this directive] Unless your gross income exceeds approximately $7,000, you have no reporting
obligation. If your income exceeds this level, then you must file Form 1040, although if
you have wages or salary income $74,000 or less you can "elect" to exclude this
income from U.S. taxation under the earned income exclusion. See my January Hot Topics for
an explanation of the earned income exclusion.. You may file amended returns and make this
election for past years, if appropriate. This exclusion only applies to foreign
"earned income" and not interest, rents, capital gains or dividend income, which
is taxed under the general rules applying to all U.S. taxpayers. [an error occurred while processing this directive] The Tax Prophet's
articles on Foreign Taxation [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] |
Sale of Residence