Karen Lee

New for 2007... premiums paid or accrued for qualified mortgage insurance during 2007 in connection with home acquistion debt on a qualified home are deductible as an itemized deduction. What's a qualified home? Feeling stupid and don't want to give erroneous info. Got this info from tax forum on 2007 tax law changes. Can only assume PMI is deductible same as mortgage points (acquisition vs. re-fi/home equity). Be kind please. Karen

Thanks... Karen

The last couple of years I have experienced a number of errors made by the IRS on paper filing. These errors do take up a bunch of time to resolve and they are normally input errors. Not a single problem on an e-file. Am I suppose to get a message here? Don't paper file? I am in a rural area and my people are very distrustful of this whole cyber thing. I keep hearing that they aren't going to give the IRS their account numbers etc and I have to just really hold it in when they are talking to me because I just want to laugh...If they have a bank account or a job the IRS HAS their number. Back to the subject...how do you charge for fixing problems that were created by the IRS...should I be promoting e-filing...if e-filing is not an option my client wants to use should I have a separate rate for preparation...is this an uncommon problem and just my experience? Karen Lee

Thanks so much. I have no intention on dealing with this. They have been clients for over 10 years and I've seen them through selling the same business 3 times now and that was difficult enough (for me). Hope to hear some more opinions on this one. There is an investigation going on. I haven't seen the paperwork but heard fraud mentioned. Karen

My client keeps calling me and I keep telling her to go to someone that is more familiar with 1031 exchanges. This is the situation as I understand it: My client has a piece of commerical property that he wants to use in a 1031 exchange. Exchange property is picked and the deal is ready to go through all criteria are met. My client finds out that the 1031 exchange company has gone bankrupt and their money is gone and so is the property. Why does this not make sense to me? My client called Taxpayer Advocate Office and they said she had to pay taxes on the deal (what deal?). Looks like to me that they have lost $ and property and there isn't any taxes to pay just losses to report. I feel so stupid...why would the $ be in the hands of the exchange company and the deed as well? Maybe the exchange property was of higher value and my client had to "put-up" money with the exchange company, the exchange company goes bankrupt takes money and the client loses "put-up" money and new property? Why wouldn't the whole deal reverse? There is a possibility the $ will be recovered before the end of the year but well after the time period of selecting the exchange property. OH....this is what the client is talking about. Will they have to pay regular cap gain on the sale of their commercial property when the $ is recovered even though they were trying for the 1031 exchange that went sour? OK, my first instinct is yes. My second is someone more familiar with 1031 exchanges needs to handle this for them. Shouldn't I be on vacation or something? Karen

Thank you all for this very valuable information. I knew I could count on you. I think I have enough info to go forward with more research for these individuals including my own family. Thanks again. Karen

Adult Family Homes, Assisted Living Homes and Skilled Nursing Homes fall under 3 separate and distinct categories in the State of Washington. Assisted Living falls under Boarding House rules and does not take care of any medical situations other than calling 911, they can do medication delegation with trained staff. Adult Family Homes can do some skilled nursing but more often than not is used for elderly with dementia, nurse on staff and has a 6:1 ratio. Skilled nursing facilities for those persons requiring 24/7 medical attention. I have Grandma (will be 101 this month) in an Adult Family Home at this time. She went from my house to Assisted Living (7 yrs) to hospital to Skilled Nursing to Adult Family Home and the experience at the Nursing Home was not favorable. However Grandma is on Medicaid and there is no problem financially with her. Then we have my mother who is in an Adult Family Home incapacitated by dementia and stroke. And all on self pay and her estate should be depleted in 3 years. At this time she is pulling out 72G from her IRA plus Social Security to take care of the Adult Family Home. Will be selling her home soon and stop the IRA distributions and live off the proceeds from the house since it will not be taxable income. Then I have a couple of clients on self pay for spouse and they have asked me about deductibility of some of these costs for Adult Family Homes. I cannot find where AFH costs are deductible since they are basically lodging and meals. So all opinions are welcome and cites are welcome and experiences are welcome.

:blink: I am reasonably sure that Adult Family Home costs are not deductible as medical costs. However skilled nursing home costs are deductible for the medically necessary portion of the costs. BUT...if a doctor tells you that your spouse requires 24/7 care because of dementia and you are not physically able to give 24/7 care...could this be considered medically necessary and deductible if spouse is placed in an Adult Family Home? Has anyone had any experience with this situation? Please tell me your experience. Thanks Karen