We are almost done with our overview of how to determine if you must pay a capital gains tax on the sale of your home. A quick recap of the last two posts: Start with what you paid for the home, then add anything that increased the value of the property and deduct anything that may have decreased the value of the property.
Those of us who remember publisher-millionaire Steve Forbes' presidential campaigns may still be able to close their eyes and hear his mantra: "Do the math." His platform was based on instituting a flat tax rate for income tax. It sounds so easy. But so does a comedian's tax reform idea: "How much did you make? Pay that amount."
A house is more than a home: It is an investment. Chances are good that the value of the home will change from the time you purchase it to the time you sell it. California's foreclosure crisis aside, most of us believe that the value will go up so we can make a profit. When you sell a capital asset like a house, you realize a capital gain or a capital loss.
The National Taxpayer Advocate, Nina E. Olson, recently issued the list of priorities for the Taxpayer Advocate Service. The TAS is the independent internal watchdog of the IRS, and Olson's annual priorities address the agency's shortcomings. For example, in our last post, we were talking about victims of tax preparer fraud and the IRS' failure to issue replacement refunds to them. The IRS has that authority -- the agency just hasn't done anything with it.
When we left off in our last post, we were discussing the Taxpayer Advocate Service's first annual report to Congress. This report, one of two prepared by TAS every year, outlines the office's priorities for the 2015 federal fiscal year.
It may feel as if the IRS and the federal government are in league against American taxpayers at times. The rules change, new taxes appear and old taxes expire -- when taxpayers expire, in fact, they still have to pay taxes. There is an agency that watches out for taxpayers, though: the Taxpayer Advocate Service.
We have been talking about offshore assets and some changes the IRS has made to reporting procedures. The best idea is always to report any foreign assets you hold with your annual tax return.
We're continuing our discussion from our last post. The subject is filing disclosures of foreign assets to the IRS. The agency recently modified the rules of the offshore voluntary compliance program and added a "streamlined" process for taxpayers opting out of the protections offered by the OVCP.
Some people have an ear for languages. They can visit a foreign country and be conversant in a matter of days. For others, foreign languages remain a mystery, if not a misery. Those French, as a friend of ours used to say, have a different word for everything.
Back in the day -- please excuse us if we overuse the expression, but a discussion of the movie "The Wolf of Wall Street" reminded us that there are adults out in the world that were born after the "greed is good" 1980s, and that made us strangely nostalgic. But, back in the day, if you bought something at Macy's that went on sale the next day, you could take the receipt back to the store for a refund of the difference between what you paid and the sale price of the item. It was a customer service thing -- remember customer service? -- a kind of perk for being a god customer with bad timing.