NT / Client hints for me

[RitaB]

These helpful notes from the client whose return I just started:

"Per TV, on the news, effective 07-01-08 IRS to allow additional 8 cents for mileage.

08 Stimulus Check (did not keep stubb) can't remember amt."


Did ya'll know about the mileage thing??!!

(Yes, I'm kidding, and yes she misspelled "stubb." She also spells "paid": "payed")

[Lion]

Client Notes

Yes, I love some of the client notes I receive with their documents:

My husband's is or was F. John Doe XXX-XX-XXXX (re her deceased husband)

The retired NYT editor who includes several clippings re tax laws that she collects over the year.

The retired woman who does the same, with highlighting and underlining and complete and thorough computations, but missing the point -- the new law re using up AMT credits that she had confused with using capital loss carry forwards.

And, the several clients who brought in their Stimulus letter telling them there would be a stimulus payment, but NO one brought in their letter specific to them telling them the amount of their payment.

[RitaB]

Remember the phone tax credit?

The retired NYT editor who includes several clippings re tax laws that she collects over the year.

I got about 30 articles about it. That has to be the thing that ranks #1 in "least important change that drew the most attention" department.

Who cares about the stock basis for my $70,000 gross proceeds?! Here's a $30 credit that I don't want you to miss cause you didn't know.

[JG EA]

The most upsetting were the news stories about:

"Normally, debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act of 2007, taxpayers may exclude certain debt forgiven on their principal residence up to $2 million ($1 million for a married person filing a separate return).

This includes many many exceptions. But I was following the rules and limiting this so much that all confidence in me was lost. I had the refi papers in my file. I know that most of the debt is not excludible and that insolvency won't work for the rest. But, if they take just the 2008 papers elsewhere with no history then.....

The rest of the story:

The debt must have been used to buy, build or substantially improve the taxpayer’s principal residence and must have been secured by that residence. Debt used to refinance qualifying debt is also eligible for the exclusion, but only up to the amount of the old mortgage principal, just before the refinancing.

All the refi's were used to buy buy buy, not buy, build, improve.