Newsletter 2010

Newsletter 2010

Special Issues

Special Issues

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Last Reviewed: Jan 2011

Last Modified: Jan 2011

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Special Issues for 2010.

Cancellation of Debt Income (that pesky 1099C). Many taxpayers have gone through a property foreclosure or short sale. If this has happened to you there may be taxable income created by the loan default. There are exceptions to the income requirements that apply to many taxpayers in this situation. Please bring any foreclosures or short sales to our attention at your tax interview and we can help sort out the issues.

No Tax on Certain Long Term Capital Gains. We still have a zero percent tax rate on long term capital gains for taxpayers in the 10 and 15 percent tax brackets. These rates are extended through 2012 and also apply to qualified dividends. Many taxpayers considered selling assets in 2010 because of the pending increase in capital gains tax rates. With this rate extension in place, you can now hang onto those investments if they still look good to you.

Roth Conversions. Roth conversions make sense for a limited number of taxpayers, and the income limits for a conversion have been permanently removed. The issue of whether to convert and when must be carefully made so please consult with us before doing so.