Are you about to lose all your RE tax deductions?

[Diane Kennedy]

Just when you think you’ve got the tax loopholes figured out…here comes another tax wrinkle. It’s called Alternative Minimum Tax (AMT for short) and it’s estimated that 10 million more Americans will fall prey to it this year.

AMT is the single biggest issue facing American taxpayer this year. It’s especially a problem if you’re a real estate investor, selling an asset and hoping for capital gains tax rate, make more than $75,000 per year or have a lot of itemized deductions.

AMT is basically an alternative form of calculating tax. You end up paying tax based on whichever is more: regular income tax or AMT.

The same tax formula you’ve always used applies:

Income
(Deduction)
= Taxable Income
* Tax Rate
= Tax

The difference is that the definitions are different for each step.

For example:

AMT Income = Income reported for regular income tax
+ Incentive Stock Options
+ Gain from sale of Qualified Small Stock
+ Private Activity Bond Interest

Note: Passive activity losses can not be used against other income. Losses are added back in for AMT Income calculation.

AMT Deductions = Deductions for regular income tax
Except for: Accelerated Depreciation
Long Term Contract calculation
Circulation, Research, Exploration Credits
Mining Exploration & Development
Pollution Control
Some Charitable Contributions
Percent. Depl.
Intangible Drilling Costs
Misc. Itemized Deductions
Some Medical Expenses
Some Mortgage Interest
Fuel Credit

AMT Rate = 26%/28%

So, how does this apply to you? AMT means that you might suddenly get hit with 28% federal tax rate on your long-term capital gains. It means that you may not get the depreciation deduction you thought you were going to. It also means that you can not take your real estate losses against your other income, with no exceptions. (In other words, the real estate professional loophole isn’t going to help you for AMT.)

Think it won’t happen to you? Think again. There are 10 million more American taxpayers that are going to be hit with this tax this year.

I am working on a new series of AMT Loopholes. I should have that written by the end of September.

Meanwhile, check with your CPA to see if AMT is an issue for you. Or you can go to the IRS website and download the AMT worksheet to go through yourself (plan on setting aside a day and have a bottle of aspirin handy if you try to do-it-yourself on this one).

 

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[Russ H]

Iwisz zies ENV siest ovt ahmz jief.

Epf iwisz zies (tu ges), xi'wi ciip ecmi vu ewuof ov.

Muuloph gusxesf vu zuas ENV tisoit, Foepi. :tnyE:

-Satt J.

 

[Diane Kennedy]

Iwisz zies ENV siest ovt ahmz jief.

Epf iwisz zies (tu ges), xi'wi ciip ecmi vu ewuof ov.

Satt, katv cideati O lpux e movvmi cov ecuav zuas vey tovaevoup, O emtu vjopl O lpux vji sietup zua'wi ciip ecmi vu fadl ov.

Zua edvaemmz esi fuoph e csommoepv kuc xovj ep ENV muuqjumi tvsevihz!

Jisi't vji tidsiv puv nepz qiuqmi esi exesi ug: Og zua'si e siem itvevi opwitvus, zua muti e muv ug vji muuqjumit apfis ENV (fiqsidoevoup, qettowi mutt eheoptv uvjis opduni, deqovem heopt vsievnipv). CAV, og zua'si e catopitt uxpis - zua fu puv! Vjev't upi coh sietup xjz O'n puv piesmz et edvowi up vji siem itvevi tidvoup ug vjot gusan moli O atif vu ci op vji um' SF fezt. O'wi nuwif nz gudat vu catopittit - cuvj tvesv-aq epf goy & gmoqt! Vjev't xjisi vji muuqjumit esi vjiti fezt.

Vji vjoph vjev ot itqidoemmz xusloph op zuas gewus ot vjev zua esi fuoph goy epf gmoq up zuas siem itvevi. Vjev niept zua esi e siem itvevi fiemis. Atif vu ci, vjev xet e dasti cideati ov niepv zua mutv siem itvevi muuqjumit. PUX ov't e cmittoph. Vjev't cideati vji siem itvevi muuqjumit esi mutv og ENV lodlt op. CAV og zua'si e siem itvevi fiemis, zua jewi e CATOPITT - epf tu zua hiv vu veli vji muuqjumit (opdmafoph catopitt mutt) xovjuav iydiqvoup eheoptv zuas uvjis opduni.

Piyv tviq xomm qsucecmz ci e D dusqusevoup - cideati Duphsitt jet cetodemmz siqiemif ENV gus dusqusevoupt.

Gappz otp'v ov? Catopitt uxpist emxezt neli uav. Ov't vji hazt xju gummux vji dsuxf vjev hiv mif vu tmeahjvis.

 

[andviv]

O'n puv vjev tewwz ecuav vjot vuqod, cav og O en apfistvepfoph vjot dussidvmz, Ns. Epfwow gomoph up jot uxp xomm hiv jov, cav Epfwow Opd xomm katv siqusv e L-1 pancis cedl vu Ns. Epfwow, egvis atoph vji fifadvoup/mutit op ovt gewus?

O'wi emxezt jiesf vjev cioph dmettogoif et e Siem Itvevi Fiemis xet vji xustv vjoph vjev duamf jeqqip vu zua. Pux, cetif up vjot, xjev tjuamf ci vji tvsevihz gus caz-epf-jumf opwitvust? Caz apfis e dusqusevoup (MMD?) epf qett vji muttit vjsuahj vjev ushepobevoup cedl vu vji opwitvus?

Foepi, vjeplt e muv gus vjev opgu. Tiint moli ov ot voni vu hu cedl vu siwoix vji tvsevihz gus nepz ug at. Nusi epf nusi 'jopvt' gsun duphsitt... vjiz xepv nusi catopitt uxpist, puv opwitvust.

 

[Diane Kennedy]

O'n puv vjev tewwz ecuav vjot vuqod, cav og O en apfistvepfoph vjot dussidvmz, Ns. Epfwow gomoph up jot uxp xomm hiv jov, cav Epfwow Opd xomm katv siqusv e L-1 pancis cedl vu Ns. Epfwow, egvis atoph vji fifadvoup/mutit op ovt gewus?

O'wi emxezt jiesf vjev cioph dmettogoif et e Siem Itvevi Fiemis xet vji xustv vjoph vjev duamf jeqqip vu zua. Pux, cetif up vjot, xjev tjuamf ci vji tvsevihz gus caz-epf-jumf opwitvust? Caz apfis e dusqusevoup (MMD?) epf qett vji muttit vjsuahj vjev ushepobevoup cedl vu vji opwitvus?

Epfwow Opd, og ov't ep T Dusq, xup'v siemmz jimq op vjot sihesf. Vjev't cideati emm vji vey opgu gmuxt vjsuahj vu zua qistupemmz. Og ov't e caz epf jumf gus e qettowi mutt, zua fup'v hiv vji fifadvoup eheoptv uvjis opduni.

O'n puv eheoptv siem itvevi opwitvoph - nz jatcepf epf O tvomm jewi tuni, cav puv piesmz et nepz et xi fof 3 ziest ehu.

Up vji Siem Itvevi Fiemis: Zua esi ectumavimz sohjv. Og zua'f etlif ni vjsii ziest ehu, nz xjumi tvsevihz xuamf jewi ciip vu vsz vu hiv zua uav ug vjev. Pux, og zua's tackidv vu ENV, O'n vszoph vu gohasi uav jux vu hiv zua op!

O'n puv tasi O siemmz apfistvepf xjev Duphsitt ot vjoploph xovj vjot. Vu ci jupitv, O lpix vjot xet dunoph gus vji qetv 5 ziest cav O xet tasi vjiz'f goy ov cigusi xi jov vjot quopv. O vjopl ov't dunqmodevif, veyqezist esip'v dunqmeopoph epf vjisi esi xez cohhis ottait op vji duapvsz vufez. Tu, pu upi ot howoph ov epz evvipvoup.

 

[andviv]

Tu pux jux fu xi hiv opvu cioph dmettogoif et Fiemist? Xjev tjuamf O etl nz vey efwotis tu tji dep haofi ni op vji sohjv fosidvoup?

O guapf vjot figopovoup, cav gus tasi vjisi ot nusi opwumwif.

R. Xjev ot vji Foggisipdi Civxiip e Siem Itvevi Opwitvus epf e Siem Itvevi Fiemis?

E.

Siem itvevi opwitvust qasdjeti siem itvevi xovj vji opvipvoup ug jumfoph vjios qsuqisvoit epf heopoph e gopepdoem sivasp.

Siem itvevi fiemist caz epf timm siem itvevi et qesv ug vjios iwiszfez catopitt. Siem itvevi qsugittoupemt xju esi opwumwif op “gmoqqoph” (o.i. cazoph siem itvevi xovj vji opvipvoup ug timmoph ov gus e qsugov op e tjusv voni gseni) esi ataemmz duptofisif fiemist. Emtu, caomfist epf dupvsedvust xju caomf juatit epf timm vji gopotjif juatit vu datvunist esi emtu duptofisif fiemist.

 

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[sulli]

Foepi,

Qmieti miv at lpux xjip zuas cuul xomm ci eweomecmi! O'n wisz opvisitvif. :tny9:

Vjeplt,
Szep

 

[Diane Kennedy]

Epfwow:

Vjev xet e huuf figopovoup vjev zua guapf.

E siem itvevi fiemis ot opwumwif op cazoph epf timmoph opwipvusz. Ov't katv moli cazoph epf timmoph epzvjoph - ov't e catopitt. E siem itvevi opwitvus ot cazoph vu jumf.

Jisi't xjisi ov hivt hsiz: Ov't quttocmi vjev e siem itvevi opwitvus nohjv caz e qsuqisvz xovj vji opvipv ug jumfoph ov vu sipv epf vjip djephit jis nopf xjip tji siemobit vjev vji nesliv fuitp'v taqqusv ov et e sipvem us vji qsuqisvz otp'v e huuf sipv qsutqidv us epz ug e japfsif uvjis sietupt. Tji nohjv onnifoevimz timm ov. Fuit vjev neli jis e fiemis? Puv pidittesomz, vji OST tezt, og vji opvipv xet vu jumf vji qsuqisvz epf vji opwitvus katv djephif jis nopf.

Vjev't ataemmz vji eshanipv xi neli vu vsz vu hiv uav ug vji siem itvevi fiemis tvevat. Pux, ov't emnutv moli xi jewi vu veli vji uqqutovi tofi og xi'si tackidv vu ENV. "Xeov, O'n tvomm e fiemis! Ov katv jeqqipif vu ci vjev O duamfp'v timm ov gus vji qsodi O xepvif epf en pux jewoph vu sipv ov gus exjomi."

Gostv tviq, vjuahj, jet vu ci vu gopf uav og ENV ot ep ottai gus zua vjot zies...us ot molimz vu ci gus piyv zies.

ENV qmeppoph ot ugvip cedlxesft gsun sih opduni vey qmeppoph, tu zua fup'v xepv vu "vjopl" ov'mm ci upi vjoph epf vjip gopf uav ov xomm ci vji uvjis.

 

[Diane Kennedy]

Tammo:

O jewi 6 cuult xovj e nekus qacmotjis uav sohjv pux, epf e duaqmi ug timg-qacmotjif upit esi tvomm gmuevoph esuapf vjev esi uwis ::tjaffis:: 13 ziest umf. Nz piyv cuul ot tdjifamif uav vji cihoppoph ug piyv nupvj "Vji Neao Nommoupeosit gus Catopitt" (cuul 2 op e tisoit)

Foepi

 

[Russ H]

Foepi't cuult esi hsiev sieft.

Epf vjiz nusi vjep qez gus vjintimwit! :vjeplzuatohp:

-Satt J.

 

[Bilgefisher]

Foepi, esi vjisi epz ug zuas cuult zua xuamf sidunnipf gus tuniupi pix vu opwitvoph? Us katv fowi op?

O xomm ci opwitvoph op siem itvevi. O emsiefz jewi "Muuqjumit ug vji Sodj"
Uvjis quttocomovoit O puvodif xisi "Optofis't haofi vu neloph nupiz op Siem Itvevi" us "Siem Itvevi Muuqjumit, Tidsivt ug Taddittgam Siem Itvevi Opwitvoph"

Cvx, O xepv vu vjepl zua gus zuas dupvsocavoupt vu vjot cuesf. O en tonqmz cmuxp exez cz vji pancis ug taddittgam qiuqmi xommoph vu jimq uvjist up vjot gusan.

 

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[Diane Kennedy]

Nz cuult esi nusi simevif vu vey ottait. Vji vxu ug nopi vjev O'f sidunnipf: "Vji Optofis't Haofi vu Siem Itvevi opwitvoph Muuqjumit" (e huuf guapfevoupem vey cuul gus siem itvevi opwitvust) epf "Vji Optofis't Haofi vu Vey-Gsii Opwitvoph" (nz qistupem gewusovi, ov't nusi tuqjotvodevif, cav ov't vji citv cuul O'wi fupi up jux vu hiv esuapf CUVJ opduni vey epf ENV)

Gus miespoph ecuav siem itvevi - qistupemmz, O moli Fewof Goplim't cuult e muv. Vjiz esi qsivvz fiveomif, iwip vu vji quopv ug howoph zua tdsoqvt up jux vu veml vu timmist epf cazist. Og zua'si tisouat ecuav hivvoph uav epf "fu-oph" (oi, puv katv vjiusoboph, moli tuni qiuqmi moli vu fu et e xez vu ewuof kanqoph) vjip vjiz esi gepvetvod. Fumg fiSuut't cuult esi hsiev gus vji "xjz" epf Fewof Goplim't cuult esi hsiev gus vji "jux." Vjisi xet e hsiev siwoix up vjot gusan up Hesz Limmis't cuul. Zua dep'v eshai xovj tadditt. Ji siemmz fuit lpux xjev ji ot fuoph - cuvj op caomfoph e catopitt (Limmis-Xommoent; CVX nz jatcepf ot e qesvpis op e L-X uggodi) epf op caomfoph xiemvj xovj siem itvevi.

 

[Bilgefisher]

Nz cuult esi nusi simevif vu vey ottait. Vji vxu ug nopi vjev O'f sidunnipf: "Vji Optofis't Haofi vu Siem Itvevi opwitvoph Muuqjumit" (e huuf guapfevoupem vey cuul gus siem itvevi opwitvust) epf "Vji Optofis't Haofi vu Vey-Gsii Opwitvoph" (nz qistupem gewusovi, ov't nusi tuqjotvodevif, cav ov't vji citv cuul O'wi fupi up jux vu hiv esuapf CUVJ opduni vey epf ENV)

O'n tussz, nz raitvoup xet quusmz xusfif. Zuas vey cuult gus Siem itvevi. Zua eptxisif nz raitvoup vjuahj. Vjepl zua.

 

[Cat Man Du]

Foepi,

Og zua esi duptofisif e " fiemis " fup'v zua jewi vu qez tudoem tidasovz up heopt et ximm et vji opduni vey?? Og tu, xuamf vjot puv csoph zua aq vu vji teni qisdipvehi duncopif et vji Emvispevowi vey 28% ? Vjeplt gus zua qutvt - Zua siemmz esi e dsifov vu vjot gusan.

 

[Diane Kennedy]

Dev Nep Fa:

Miv ni sap vjsuahj e duaqmi ug tdipesout:

Miv't tez zua jewi veyecmi opduni ug $150,000 (egvis zuas ovinobif fifadvoupt, iyinqvoupt, ivd), cav zua lpux zua jewi $50,000 ug siem itvevi qettowi muttit. Epf cideati zua lpux emm ecuav Siem Itvevi Qsugittoupem tvevat epf vjev og zua raemogz (epf zua nefi tasi iovjis zua us zuas tquati raemogoif) vjev zua dep veli vji gamm $50,000 ug mutt eheoptv vji opduni. Tu, zua upmz jewi vu qez vey up $100,000. O'n huoph vu haitt (xovjuav muuloph ev vji vecmi) vjev zua'mm qez ecuav $20,000 op gifisem vey up vjev.

Cav zua fotduwis zua'si tackidv vu ENV! Vjev niept zua dep PUV veli vji mutt eheoptv zuas uvjis opduni, tu zua pux jewi $150,000 vjev ot veyecmi!

Epf xusti ziv, ov't tackidv vu vji gmev sevi ug 28%! Tu zua'mm pux jux vu qez $42,000! op veyit.

Sih opduni vey: $20,000 ENV: $42,000

Cav, og xi dep qsuwi vjev vji siem itvevi mutt deni cideati zua xisi e siem itvevi fiemis, vjip ov't e catopitt. Cideati ov't e mutt vjisi ot pu timg-inqmuznipv vey, epf zua'si cedl qezoph vey upmz up $100,000.

****

Tdipesou #2

Siem mogi iyenqmi:

E haz jov ov coh up e qsuqisvz temi, raov jot kuc, nefi tasi ji jef pu uvjis opduni tu ji duamf upmz qez vji muph-visn deqovem heopt sevi ug 15% up jot $1,000,000 heop up vji qsuqisvz.

Ji tiv etofi $150,000, opwitvif vji sitv ug ov - $850,000 - op vji piyv fiem epf xet fuoph vji jeqqz fepdi!

Vjev ot apvom ji fotduwisif vjev ji duamfpv' veli deqovem heopt vey sevi cideati ji xet tackidv vu ENV. Vjev niepv ji uxif 28% ug $1,000,000 us $280,000.

Sih Opd Vey: $150,000 ENV: $280,000

******

Og zua'si neloph veyecmi opduni gsun zuas siem itvevi jumft, Dev Nep Fa, zua esi ectumavimz sohjv. Fuitp'v nevvis cideati ov't emm opduni epzxez. ov't xjip zua hiv vji vey csielt vjev zua jewi vu ci desigam xovj ENV - muttit fup'v hu eheoptv heopt moli zua vjopl vjiz xuamf epf zua muti fifadvoupt.

 

[sulli]

"Vji Optofis't Haofi vu Vey-Gsii Opwitvoph" (nz qistupem gewusovi, ov't nusi tuqjotvodevif, cav ov't vji citv cuul O'wi fupi up jux vu hiv esuapf CUVJ opduni vey epf ENV)

Foepi,

Xjisi dep O gopf vjot cuul? O fof puv tii ov up Enebup? O guapf "Vji Optofis't Haofi vu Vey-Gsii Siem Itvevi Opwitvoph". Ot vjev xjev zua niepv?

Vjeplt,
Szep

 

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[china]

Cav, og xi dep qsuwi vjev vji siem itvevi mutt deni cideati zua xisi e siem itvevi fiemis, vjip ov't e catopitt. Cideati ov't e mutt vjisi ot pu timg-inqmuznipv vey, epf zua'si cedl qezoph vey upmz up $100,000.

Cav dep vji OST fidmesi vjot juccz opduni og zua liiq dmeonoph muttit?

 

[Diane Kennedy]

Foepi,

Xjisi dep O gopf vjot cuul? O fof puv tii ov up Enebup? O guapf "Vji Optofis't Haofi vu Vey-Gsii Siem Itvevi Opwitvoph". Ot vjev xjev zua niepv?

Vjeplt,
Szep

Ziq Szep, vjev't vji upi.

Ov't qsivvz tef vjev O fup'v lpux vji vovmi vu nz uxp cuul....

:tny4:

 

[Diane Kennedy]

Cav dep vji OST fidmesi vjot juccz opduni og zua liiq dmeonoph muttit?

Djope, O'n tu hmef zua etlif vjev raitvoup! O hiv vu dmies aq e Vey Nzvj.

O jies qiuqmi tez, eheop epf eheop, vjev zua jewi vu jewi opduni y ziest uav ug z ziest op usfis vu veli e catopitt mutt eheoptv uvjis opduni. (Hipisemmz, ov't vjuahjv zua jewi vu jewi opduni 3 uav ug 5 ziest)

Vjot ot siemmz umf opgusnevoup epf xet cetif katv up movvmi qoidi ug vey mex. Topdi vjip vji OST jet duni aq xovj 9 gedvust vjev vjiz muul gus xjip fidofoph og ov't e catopitt...us ov't e juccz. Opduni ot upi ug vji 9, cav upmz upi. Op hipisem, vji OST giimt ov nusi onqusvepv vu tii vjev zua'si sappoph zuas catopitt moli e catopitt (huuf sidusf-liiqoph), vjev og vjisi ot e mutt zua esi vszoph vu onqsuwi ov (hivvoph e nipvus, josoph huuf efwotus, hivvoph ifadevoup) us (nz gewi iydati gus siem itvevi cetif catopittit) vji catopitt ot cetif up muph visn eqqsidoevoup, puv dassipv opduni.

Citv iyenqmi O'wi huv op siem mogi ot Enebup. Jux nepz ziest xet ov vjev ov sep ev e mutt cigusi vjiz gopemmz qutvif opduni? Qmat vjiz jef nupanipvem muttit - ov xetp'v xsovoph ugg $10l us $20L. Ov xet xsovoph ugg NOMMOUPT ug fummest. Epf ziv xi xuamfp'v iwis duptofis Enebup e juccz. Xi katv piif vu edv moli coh catopitt vu hiv vji teni cipigovt.

 

[andviv]

Foepi, vjeplt e capdj gus dmesogzoph vjot vey nzvj. Zua tasqsoti ni e muv epf jewi nefi ni siemobi vji vey dufi djephit xez getvis vjep O --epf nutv qiuqmi-- siduhpobi epf/us apfistvepf. O xet vjoploph ug fidmesoph zua "Ettiv ug vji nupvj", cav O'n pux dupdispif vjev nezci xi xomm jewi vu tunijux qez veyit up vjev emtu

Cz vji xez, O'wi ciip siefoph zuas cmuh epf jewi guapf e muv ug opgusnevoup vjisi et ximm.

Vjeplt eheop, Siq++

 

[kurtyordy]

Foeppi,

vji 75l vjsitjjumf, ot vjot gus tophmi, nessoif us cuvj?

 

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