Although the massive $65 billion Ponzi scheme created by charlatan Bernie Madoff is no laughing matter, I couldn't resist posting this video as it's quite humorous. Enjoy…
(Video created by Flinch Studio.)
Archives for March 2009
The Credit Crisis Visualized – An 11 Minute Video
Understanding the credit crisis can be somewhat complex.
This short (11 minute) video explains what the credit crisis is and how it got started. It's a fun and informative way you will get a quick lesson in the economics and the impact that this economic crisis has from the home owner to the global economy. Enjoy this animated lesson in modern economics!
(Video created by Jonathan Jarvis.)
New IRS Red Flag – Mortgage Interest
The IRS has begun targeting individuals with larger mortgage interest deductions in an effort to increase their tax revenues. They are currently sending out audit notices to DC residents as part of their test, but will quickly expand to the rest of the country once their audit systems are in place. If you're a real estate investor you need to be aware of this and plan accordingly.
You must meet three criteria in order to legally take the mortgage interest deductions:
- You can only deduct the mortgage interest on debt up to $1,000,000. This includes your personal and second residence combined.
- You can claim an additional $100,000 for a second loan or HELOC. (This is completely disallowed for AMT taxpayers.)
- You can only deduct the original amount of your indebtedness. In other words, once you pay down your loan your deduction does down and stays down. Even if you refinance, you can only claim the original (lower) amount of your loan before refinancing. This is one item that most people forget or don’t know about.
The IRS may strike gold here. They will want to see where you spent the money from your refinances or new HELOC loans. It would be wise to show that the money was used for home improvements or business purposes.
With the economy in disarray and the federal government hungry for additional tax revenues, it’s more important than ever for you to be on top of the real estate tax law changes. Remember that a good tax advisor can help you achieve your real estate investing goals sooner by avoiding the pitfalls along the way.
