The Federal Tax Credits Blog

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As real estate agents, it’s our duty to disclose any and all features of a home that may affect its value in the eyes of the buyer. This naturally includes telling buyers about material flaws like water damage or deteriorating roof shingles, but full disclosure can also include non-material elements like violent or illegal acts that have taken place on the property. While a home’s sordid past may not affect it structurally, its perceived value could be reduced due to the stigma it’s acquired.

Laws vary state by state regarding what types of incorporeal blemishes must be disclosed to the buyer.

In states where a death isn’t on the list of mandatory disclosures, the real estate agent is faced with a moral quandary. If he tells the buyer about the event, she may back out of the sale or demand a price reduction. Neither scenario will leave you with a happy seller.

If you decide not to tell the buyer about the death, she could end up suing you for misrepresentation, in addition to dragging your reputation through the mud. Word of mouth carries a great deal of weight in our industry, so it’s important to be honest and responsible with both parties of the transaction.

There’s also your conscience to think about. As agents, while our main priority is our clients, we also owe it to the buyers to be forthcoming about the history of the home, and to provide them with enough facts so they’ll be able to make an informed decision.

A large number of agents make it their rule to not disclose immaterial flaws unless asked directly about them. This can be a risky decision, particularly if the home was formerly used for something illegal like a meth lab. In a case like this, the home may be nearly new and in great condition, but the buyer’s safety could be at risk if for instance, a drug addict comes to the house looking for a hit. Particularly if the buyer has children, the house’s past could have a huge impact on their decision to buy the home.

A death in a home can be a particularly tricky situation for an agent to deal with. Death from old age or from a non-contagious illness seems to have less of a stigma attached to it, but the situation can still spook some buyers. If the death was a suicide or a murder, buyers may have a much more difficult time shaking off their unease.

Many people believe that dark energy can remain in a home after a violent death, and they fear that it may harm them somehow. There’s also the idea that a haunting can occur if a person dies prematurely, and very few buyers want to live with an angry ghost.

If you tell buyers about a grisly event that’s taken place on the property, they may very well back out of the sale. This isn’t good for you or your client, but you’ll be able to sleep well at night, knowing that you were honest. If the buyer decides to buy the home despite the violent event, then they’re doing so with all the facts in hand. You won’t be responsible for any buyer’s remorse, and you won’t be putting yourself at risk for charges of misrepresentation.

Another week of GW News, January 24, 2010 [A Few Things Ill Considered]

Logging the Onset of The Bottleneck Years This weekly posting is brought to you courtesy of H. E. Taylor . Happy reading, I hope you enjoy this week’s Global Warming news roundup Read the rest of this post… | Read the comments on this post…

Perfect Starter Home!

Value added tax (VAT) has always been a cause of perplexity to the real estate buyers. While some builders are recovering VAT from the customers, there are others who are not charging their customers at all. This has led to much confusion for the property buyers as to whether VAT needs to be paid and if it does need to be paid, what should be the amount.

The VAT system replaced the sales tax system with the objective of simplifying the tax regime and to avoid the problem of double taxation. VAT is a multi-stage tax levied at each stage of the value chain with the provision that tax credit will be allowed for the tax paid at an earlier stage.

Under the VAT structure, there are two categories of rates – four percent or 12.5 percent. The idea behind this was to bring about uniformity in the levying of tax by different States and simplify the complex structure under the sales tax system. Different States have enacted the VAT Act for their State along with certain variations. While some States have moved away from the basic rate structure, some have introduced certain exemptions and concessions for the benefit of specific sectors.

In Karnataka, the real estate developers or builders have an option to charge VAT to the customers under two schemes. The first one is the composition scheme where the builder pays four percent of the construction cost as VAT. In this case, he does not claim anything from the individual owners.

Under the second scheme, the builder can collect 12.5 percent of 70 percent of the cost of construction from the individual owners. This works out to 8.75 percent of the total cost of construction. VAT is applicable only to materials and 70 percent of construction cost is representative of the materials cost in construction. VAT is calculated on the cost of the flat, parking space cost and amenities.

While some may think that it is unfair for buyers where the builder opts for the second scheme, it is not so. In the first case, although the builder is paying VAT himself, the additional burden will be passed on to the owners by way of a higher price. Similarly, where the builder is recovering VAT from the owners, the price of the flat would be lower to that extent since VAT is an additional cost to the buyer. Failure to do so may render him uncompetitive in his overall pricing.

Courtesy:- TOI dt:- 05-09-2009

Business Notes

NEWS & NOTES

Nov 2009 Home Buyer Tax Credit

Every modern kitchen will need kitchen heating appliances in one way or the other. There are many kitchen heating appliances the choice will depend on what you can afford and what your needs are. Important thing is to get the right appliances for your kitchen. There are both stand alone and built-in kitchen heating appliances available in the market to choose from.

Modern technology has brought with it modern heating appliances but it doesn’t mean that you should get every heating appliance out there. These appliances include microwaves, cookers, hot water dispensers, toasters and others. When buying kitchen heating appliances some of the factors you should keep in mind include the performance of the device, durability, cost, multi functionality, design and quality among other factors.

There are many manufacturers of kitchen heating appliances all you have to do is find out the best, one that produces quality appliances. It is better to get from the best even if the price may be a bit higher as long as you are sure what you are getting is worthwhile. This way you get some value for the money you spend.

The costs of these items will also differ from one place to the other depending again on the quality. The best place to find good deals for kitchen heating appliances is the internet. You can make comparison of all the manufacturers or sellers to find out which one gives you the best price for the exact kind of appliance you want. Online comparisons are both faster and easier and you can always identify items on discount.

The other thing to consider is the size of your kitchen. If you have a big kitchen, then you can go for bigger heating appliances that you are sure will fit well in the kitchen. Just make sure you leave enough space in the kitchen for people to move around. Big appliances also cost more so you should keep the price in mind too when going for them.

The performance of the heating appliance is very important since you don’t want to get something whose functionality you cannot ascertain. Most of the good quality kitchen heating appliance are better performers hence make sure whatever you are getting will perform according to expectations.

The other is the ease of operation of the heating appliance you are getting. Make sure instructions provided are easy to understand and not something you will take ages tying to figure out how it operates. The safer it is to use the appliance, the better. Some of them such as the microwaves turn themselves off when the time you had set is up hence they rarely burn the food.

Remember to get a good design of the heating appliance that will make your kitchen look good. Modern designs of heating appliances are available in many attractive designs to choose from. Some of the heating appliances are multi-functional and these are the ones you should go for. This is because they save on space and money.

Chinese migrant worker finds better life at home

Zhang Yunluo, a young farmer in China’s eastern Shandong Province, started his heater production plant after returning home in December last year from Tianjin. The foreign-funded firm at which he worked had been hit by slumping orders due to the economic downturn — and Zhang, 27, paid with his job. “It’s good to stay close to my parents in the village. The first batch of energy-efficient …

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Question: flexible spending account? child?

I really don’t understand about that. I am not sure I should do this. how does this work? on my w-4 filled out one for child tax credit but for fsa should I do it? if so how much? day care is going to cost 182/week. if I chose to do it, do I need to file a claim or when i file end of the year return? I am really duh on that part.

Answer: When I figure for my flexible spending account for childcare , I multiply the number of weeks in the year 52 x the amt{your case 182.00} Will you be having any off days where you will keep your child with you{as long as the day care doesn’t charge you.} subtract this amount. My day care gave me one week vacation a year. so I subtracted this amount. This is really more beneficial for you than using the childcare tax credit{ you cannot use both} Because By removing money for childcare before your taxes are applied to your income, lowers your your income bracket so you have less taxes to pay . That is why the program is considered a benefit . But be careful, save your receipts and turn them in , other wise the “plan keeps the money and we don’t want that. Money will be taken from each check before taxes are applied to your earnings for child care . you will get his money back after you turn in your receipts for child care without the tax man ever touching it . A planned legal loophole!

Dancing With The Stars: Helio Castroneves Is A Daddy!

Well, he’s conquered Dancing With The Stars and the Indy 500 – surely he’ll have no problems raising his new baby girl. Helio Castroneves and girlfriend Adriana Henao welcomed their first child, Mikaella, into the world yesterday. Keep reading for more details… After being acquitted for tax evasion last spring and then winning the Indy 500 again, Helio [...] SHARETHIS.addEntry({ title: “Dancing …

In November 2009, the IRS started a new National Research Program Initiative (the Initiative): an industry wide specific random audit of employment taxes for 6,000 entities to encompass the course of the next thirty six months. The scope of the Initiative is dual in nature: First: assess systemic employment tax compliance: and second: collect assessments from delinquent employers.

With tax revenues decreasing from the down economy, the U.S. Treasury Department is increasing its efforts to close the tax gap the difference between the total tax liabilities and taxes paid to the IRS. Auditing employment taxes is seen by the IRS as a crucial means of closing the tax gap. For tax year 2001 for example, the gross tax gap was estimated by the IRS at around $345 billion, with underreporting of employment taxes accounting for around 17% of the tax gap.

The IRS will audit companies to ensure that Federal withholding taxes are deducted and paid over to the government from employees wages for Social Security and Medicare as well as Federal Unemployment taxes. An employer found to be in noncompliance could face harsh civil penalties and interest on unpaid taxes. These fines could have a particularly severe impact on small business owners.

The IRS has prioritized four areas to focus their auditing efforts under the Initiative, including:

Worker Classification: i.e. whether an employer properly classifies an employee as an employee or independent contractor for tax purposes. Determining which depends on the behavioral, financial and type of relationship the company has with the person performing the work.

Employee Fringe Benefits: A fringe benefit is a form of pay for the performance of services. i.e. benefits such as insurance coverage, company car or child care, etc. that are provided by employers tax free to employees but not to independent contractors.

Reimbursed Business Expenses: e.g. reimbursement for taking a client to lunch, purchasing office supplies: which requires a written business expense plan. I.E. You must have paid or incurred expenses that are deductible while performing services as an employee. You must adequately account to your employer for these expenses within a reasonable time period, and you must return any excess reimbursement or allowance within a reasonable time period.

Compensation of Owners who are also employees of the company, whereby unpaid taxes may result in personal liability for the employer.

Since the employment tax audits Initiative has begun, it has been reported that the IRS has already started the process of selecting businesses for audit of their employment taxes. Noncompliance with employment tax law can result in severe repercussions for employers. To ensure that procedures are in place to meet with compliance of applicable tax law can save time, money and distress in the event of an audit.

For example, the Internal Revenue Code requires each employer to properly categorize their Worker classification in order to not only make sure they are in compliance with the tax laws but also be able govern their workers appropriately . Employers should consider consulting with experienced counsel in preparation for the Initiative and in the event of an audit of their employment taxes.

Hawaii’s economic prospects a mixed bag

No need brag, brah. Hawaii’s financial picture is expected to see growth in this new year as the economy stabilizes, more tourists take vacations here and more jobs are created, especially in hot industries like alternative energy.

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Remodel Replace Refund!: Your DIY Guide to the 2009-2010 Federal Tax Credit for Homeowners $1.42 Part home improvement book and part financial instrument, Remodel, Replace … Refund makes sense of the home remodeling provisions of the 2009-2010 Federal Tax Credit for Homeowners. Learn which types of improvements qualify and how to file the paperwork to get your share of this popular element of the Stimulus Plan. Then, see clear step-by-step photos that show how to do the work yourself–most …

Energy Tax Credit Fox 47 2009 11 15 Manthe Job