California 2008, end of the year tax planning
This just in from CPA, Marilyn Ziemann:
"Home Mortgage Debt Relief — Under a special rule that applies to years 2007 through 2012, taxpayers can exclude from taxation up to $2 million ($1 million for an unmarried person filing separately) of home “acquisition” debt forgiven on their principal residence. Debt forgiven on second homes, rental property, business property, credit cards, or car loans do not qualify for this special tax-relief provision.
Whenever your debt is reduced or eliminated, you will receive a year-end statement (Form 1099-C) from your lender. By law, this form must show the amount of debt forgiven, and if the debt relief involves a foreclosure or repossession, Form 1099-C will generally include the fair market value of the property taken back by the lender. 
Home Energy-Efficient Credit
The credit for certain energy-efficient property installed on the taxpayer’s principal residence that originally expired in 2007 has been reinstated for 2009 only. This provision allows a nonrefundable $500 credit for the installation of qualified windows, skylights, air circulation systems, hot water boilers and other energy-efficient equipment. Biomass fuel stoves that heat the residence or heat water for the residence, and asphalt roofs which include appropriate cooling graduals have been added to the list of qualifying property. "







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