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For all the "hoorah" surrounding the recent Congressional "patch" ostensibly enacted to exonerate many from the clutches of the alternative minimum tax, we say: much ado about next to nothing!
The main element of the so-called 'patch' is a new rule, applicable to 2007 only, we should add, which increases the maximum AMT exemption amount over its 2006 level by $3,700 for married folk filing jointly.
That's it - a measly 3,700 bucks!
And if that isn't little enough for you, note that after 2007 the maximum AMT exemption amount will drops significantly to where it was in the year 2000 unless Congress acts.
Considering the oxymoronic implications of Congress "acting" on anything, we wonder what all the flap is about.
Moving on to more substantive issues, one good thing recently enacted by Congress was a rule to provide tax relief for homeowners whose mortgage debt is forgiven.
Under prior law, a homeowner could be taxed on the amount of forgiven mortgage debt.
Say your mortgage was $100,000 and your lender foreclosed you out and sold your house for only $95,000. Guess what - you would have income of $5,000!
Same result as if your lender wasn't such a Shylock, and simply reduced your debt to the $95,000 level.
Under the new law, however, a taxpayer wouldn't have to pay tax on as much as $2 million of debt forgiveness (assuming a "qualifying loan," secured by a "qualified principal residence.")
The change applies to debts discharged between January 1, 2007 and December 31, 2009.
Another breath of fresh air in the new law for homeowners - some liberalization of the rule governing gain exclusion associated with the sale of a principal residence.
Previously, the maximum of $500,000 exclusion was available only if a husband and wife filed a joint return for the year of the sale.
If the home was sold in a year after the year in which one spouse died - when a joint return would generally no longer be permitted - the surviving spouse could only claim an exclusion of as much as $250,000.
New law, however, allows the survivor to claim the full $500,000 if the sale occurs not later than two years after the spouse's death, provided the requirements for the $500,000 exclusion were met immediately before the decedent's death, and the survivor has not remarried as of the date of sale.
CONSULT YOUR TAX ADVISER - 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, Ltd., with offices in Incline Village and Reno. He is also a contributor to the recently published eleventh edition of Tax Savvy for Small Business, published by Nolo. He may be reached at (775)- 831-7288, and welcomes comments at jquinn@ashleyquinncpas.com.
The main element of the so-called 'patch' is a new rule, applicable to 2007 only, we should add, which increases the maximum AMT exemption amount over its 2006 level by $3,700 for married folk filing jointly.
That's it - a measly 3,700 bucks!
And if that isn't little enough for you, note that after 2007 the maximum AMT exemption amount will drops significantly to where it was in the year 2000 unless Congress acts.
Considering the oxymoronic implications of Congress "acting" on anything, we wonder what all the flap is about.
Moving on to more substantive issues, one good thing recently enacted by Congress was a rule to provide tax relief for homeowners whose mortgage debt is forgiven.
Under prior law, a homeowner could be taxed on the amount of forgiven mortgage debt.
Say your mortgage was $100,000 and your lender foreclosed you out and sold your house for only $95,000. Guess what - you would have income of $5,000!
Same result as if your lender wasn't such a Shylock, and simply reduced your debt to the $95,000 level.
Under the new law, however, a taxpayer wouldn't have to pay tax on as much as $2 million of debt forgiveness (assuming a "qualifying loan," secured by a "qualified principal residence.")
The change applies to debts discharged between January 1, 2007 and December 31, 2009.
Another breath of fresh air in the new law for homeowners - some liberalization of the rule governing gain exclusion associated with the sale of a principal residence.
Previously, the maximum of $500,000 exclusion was available only if a husband and wife filed a joint return for the year of the sale.
If the home was sold in a year after the year in which one spouse died - when a joint return would generally no longer be permitted - the surviving spouse could only claim an exclusion of as much as $250,000.
New law, however, allows the survivor to claim the full $500,000 if the sale occurs not later than two years after the spouse's death, provided the requirements for the $500,000 exclusion were met immediately before the decedent's death, and the survivor has not remarried as of the date of sale.
CONSULT YOUR TAX ADVISER - 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, Ltd., with offices in Incline Village and Reno. He is also a contributor to the recently published eleventh edition of Tax Savvy for Small Business, published by Nolo. He may be reached at (775)- 831-7288, and welcomes comments at jquinn@ashleyquinncpas.com.
