All Forum Posts by: Bill Walston

Hi Kevin -

Is this house one that you are buying for cash? Traditional financing? Or are you doing a Sub-2 or lease option yourself? (They are NOT the same animal by the way.) The manner in which you purchase the house will have some bearing on your exit strategy.

Actually, I'm having some difficulty following your scenario. I'm not sure what you mean by the "old" contract? I'm guessing that is between you and the owner (but you didn't say).

If you give a bit more information we can better answer your questions. :D

I would say, Charles, this would be a definitive "no." :-) Based on the $7 expenditure at Micky D's this landlord is eating alone. As such, the meal is personal and 100% NON-deductible regardless of his activities prior to the meal. For a 50% deduction to be allowed there has to be a business reason for the meal, which by implication would include a business colleague.

Google voice has worked fine for me so far. I use my GV number on bandit signs and other marketing materials. Like Andrew, I've changed my settings to get rid of the initial connect message.

Jon is correct. That being said, an exception would be made if you were a military spouse (see Form 5405, Part III, 12). You would not have to repay the credit as long as your new primary residence (and duty station) is at least 50 miles from the residence used for claiming the credit. The exception does not apply to a fiancé however.

What Elisha said :-) I'm now doing with google voice what I was doing with SKYPE. I set up a local google voice number and forward it to my cell. I'll then use that number on my bandit signs, flyers etc. Works great!

hhhmmmm...by my rough calculations and disregarding any expenses of closing etc, did Investor 1 realize that his better deal would have been to stay with Investor 2? Or was he/she afraid that Investor 2 would not close and went with the "bird in the hand" theory?

Yep. The lease buyout would be deductible.

I hate to be the bearer of bad news, but no, if you are filing your rentals on Schedule E each property should have a separate entry on the form. Expenses directly attributable to a specific property must be allocated to that property. There are ways to combine the "indirect" or general expenses of your rentals without allocation, but I will leave that to you and your tax pro. :-)

Yep Bryan, that is an idea that is being bandied about in DC. And it's being pushed by the current administration. Last year Congress rejected a proposal that would reduce the amount wealthier taxpayers could deduct for home mortgage interest payments. Democrats on President Obama's financial commission are now calling the mortgage interest deduction a “tax entitlement†and are pushing for elimination. This is not the first time the elimination of the interest deduction has been proposed however. Five years ago, a bipartisan tax reform commission established by President Bush made a similar proposal that was also rejected by Congress.

Yep, the rules are different for an investor. The Mortgage Debt Relief Act applies only to a primary residence, not to real estate purchased as an investment. And yes, the lender does have the discretion to decide whether to issue a 1099-C or pursue a deficiency judgment. If the determination is NOT to pursue the deficiency then a 1099-C is mandatory if the forgiven debt exceeds $600. As Jon mentioned, even if a 1099-C IS issued the amount will not be taxed if the debtor is insolvent when the debt is cancelled. Just remember to file Form 982 in the year the 1099-C is issued. If a deficiency judgment is pursued, the tax situation is moot as the debt is not considered cancelled.