My 79 yr old mother is buying a house for me to live in. She is
putting it in a trust. I will be making the payments to her in the
form of rent, the trust will glean the tax benefits.
When she dies, does the house have to be refinanaced or can the trust
continue to make the payments, continuing to get the tax
benefits( which can be redistributed back to me)?

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The CA household employer payroll taxes are paid to the
Employment Development Department. They are not paid
as part of the state income tax.

Are such employer payroll taxes deductible on Form 1040?
If so, where is that amount reported on Form 1040?

If CA household employer payroll taxes are not deductible
because they are paid separately, it would seem unfair if
other states include household employer payroll taxes in
"income" taxes, as Form 1040 does (Sched H). In such
cases, the household employer payroll tax would effectively
be deductible because it is "hidden" in the state income tax
deduction on Sched A.

I am a household employer of one employee.

How should I rounding errors that cause discrepancies between
the sum of what we actually withheld periodically for SS,
Medicare and CA SDI v. what we should have withheld based
on the year-end total gross wages?

And for the future, how should periodic amounts be rounded to
minimize problems? In particular, should I always round down
so that the employee is not penalized and any difference is
simply paid by the employer (me)?

Consider the following hypothetical. We pay a daily wage of
$70.85 gross and $65.00 net, withholding $4.39 SS (at 6.2%%),
$1.03 Mc (at 1.45%%) and $0.43 SDI (at 0.6%%).

If the employee works a total of 104 days, the year-end totals
are $7368.40 gross, $6760 net, $456.56 SS, $107.12 Mc and
$44.72 SDI.

But based on the gross, the totals should be $456.84 SS,
$106.84 Mc, and $44.21 SDI.

I have a potential client who want to "lend her home" for an extended
period, three months, to a 501c3 to run a House Tour operation. The
501c3 will be fixing up the house with furniture and decorations,
charging admissions, holding fundraisers etc. The owner will have to
rent temporary accommodations, move her "stuff out" and move back in.
Likely she'll pay the utilities as well.

Do we have any history on the tax treatment of this situation.

Noel Nichols
Chenango Business Services

Question: If I earned the majority of my income this year through one
check (1099) what would be the most efficient way to pay/calculate my
estimated taxes? Since my income is significantly higher than for
2006, I was wondering if the 'safe-harbor' of paying 90%% of last years
taxes wouldn't apply. Then, of course, I would pay the difference on
or before April 15th. My gross income for 2007 is below $150,000.
Any thoughts?

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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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On Jan 14, 9:37 pm, rdsa...@gmail.com wrote:

No, but could you claim her as a dependent? See the rules in the 1040
instructions booklet for qualifying child on page 15 (age test,
support test, residency test) and the exception to residency test for
students on page 17. The time that she was in school is considered
time she lived with you, though the total time she lived with you must
be more than 6 months.

This is a about a personal debt secured by a promissory note (not
between relatives) that went into default in 2006 and was settled in
2007 after lengthy, expensive legal negotiations. The settlement
included an initial cash payment of about 40%% of the original debt,
followed by a new, 5 year promissory note for about 25%% of the original
debt, with the remaining 35%% uncollectible by the settlement agreement.

We are advised that this is a non-business bad debt (section 166) and
may be deductible (to the extent of the 35%% uncollectible) as a
short-term capital loss. However, in reading the tax materials,
searching the tax cases and reviewing other opinions we have found that
we may not meet the requirement of "totally worthless" debt to qualify
for the deduction. The tax regulations (CFR Title 26 section
1.166-5(a)(2)) and the frequently referenced "Buchanan vs US" case seem
to indicate that. Yet we have seen CPA postings suggesting otherwise
and have found the same in reputable references like Sidney Kess' "1040
Preparation and Planning Guide", p.296 ¶2405 (I think).

On Jan 14, 5:54 pm, rita gmail.com> wrote:

CCH TAX NEWS for January 15, 2008

FEDERAL NEWS

Final Regulations Provide Guidance on Succession of Liquidating
Corporation's Items by Consolidated Group Members (T.D. 9376)http://
tax.cchgroup.com/news/headlines/2008/nws11508.htm#1

IRS Identifies Frivolous Positions for Purposes of Penalty on
Frivolous Returns and Submissions (Notice 2008-14; IR-2008-8)http://
tax.cchgroup.com/news/headlines/2008/nws11508.htm#2

Life Insurance Companies Alerted to Income Tax Issues Relating to
Proposed Valuation Method and Reserves Calculation (Notice
2008-18)http://tax.cchgroup.com/news/headlines/2008/nws11508.htm#3

STATE NEWS

California --Multiple Taxes: Comprehensive Revision to SBE Appeals
Rules Adopted
http://tax.cchgroup.com/news/headlines/2008/nws11508.htm#4

California --Corporate, Personal Income Taxes: Penalty-Free Late
Disclosure Terms Set for Organizers, Material Advisors
http://tax.cchgroup.com/news/headlines/2008/nws11508.htm#5

On Mon, 14 Jan 2008 15:58:08 EST, white_zombie69
gmail.com> wrote:

See Reg 1.988-3 for the rules.