More on interest tracing

[S T]

Would anyone like this client!

My head is spinning trying to sort this one out. Client has a main home with a $800,000 mortgage, refinanced for interest rates about 3 times in the last 15 months, and his old main home with a mortgage interest of about $640,000 also refinanced for interest rates, and probably one take out cash for part of the down payment on the current main home. Yes I know well over the limit. But wait, there are also credit lines against these two homes, with monies going back and forth, purchasing another rental, buying a car, buying a time share, paying off some other loan, making mortgage payments on other loans, etc.

Then 4 rental properties, and loans, and credit lines against these, some of which is for the rentals, some of which is not.

How in the world do we ever track this mess? My starting point has to go back to probably 2 years ago and that is if I am lucky!



Sandy

[Gretel]

Sandy,

You are right, how are we supposed to track messes like this and CA is prone for scenarios like this. Montana on the other end of the spectrum hardly ever has taxpayers with mortgages over 1 mil. I sometimes wonder how the tax code impacts taxpayers so very differently depending on where they live, and they it would be more fair if phase out limits and such would be based on locality like per diem is.

Don't worry, I will not suggest this to congress.

So I guess you have to choose between charging at least $1,000 for this tax return, move to Montana, get drunk and then do your best, or screem as loud as you can and then do your best. For later option make sure the people from the funny farm are not to close.

Good luck, tax sister.

Gabriele