by: Jeffrey Quinn
Those of you who actually still have any money, in these days of hope and change, and who may be considering your first home purchase, might actually be in for a good tax result.
Recall that under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before next December 1 can receive up to an $8,000 tax credit. And if that's not enough for you, consider that you might even be able to take the credit on your 2008 income tax return (which isn't even due yet), or on the 2009 return.
Say what?
Right O! Here are a few options for you.
1. If you haven't filed your 2008 return yet, consider filing an extension by April 15, 2009. If you really think you will close on that dream home pretty soon, seek an automatic extension to October 15, 2009, thus enabling you to eventually plug that credit into your 2008 return and get your dough faster.
2. File now and amend later--especially if you're anticipating that big refund and don't want to wait one minute longer, go ahead and file your 2008 return on time, collect your check (and deposit it before Uncle goes broke), and then amend when you know you are entitled to the credit. You could still get the benefit faster, this way, than by waiting until filing your 2009 return a year from now.
3. And if you've already filed your 2008 return, and you're sure you are entitled to the credit, amend 2008 any time, and, again, get the benefit sooner.
4. Forget all this extend/amend stuff, and just wait until you file in 2009--hoping that Barack hasn't changed the law in the mean time.
And if you're unlucky enough to have been caught up in the Madoff mess, the
IRS is there for you--isn't that cuddly?
Revenooers have issued guidance that says if Bernie clipped you, you are entitled to a "theft loss," which is an ordinary, as opposed to a capital loss. In other words, the loss wouldn't be limited to $3,000 (capital loss limitation rules) but would be available to offset other ordinary income. Further, the loss is not subject to limitations that are otherwise applicable to "personal" casualty and theft losses (i.e. the loss may be deducted regardless of the level of your adjusted gross income).
And who knows--even if you haven't been clipped by Madoff, other investments of a similar nature (which have been seen in these parts in recent years) may likewise qualify for IRS largesse.
CONSULT YOUR TAX ADVISOR - This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation.
Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, with offices in Incline Village and Reno. He is also a contributor to the recently published twelfth edition of Tax Savvy for Small Business, published by Nolo. He can be reached at 831-7288, and welcomes comments at jquinn@ashleyquinncpas.com.
