Save Your 2005 Tax Refund !!

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Believe it or not, an unfiled individual federal income tax return that will show a refund, may soon be unavailable to the taxpayer. 

The reason is that although a late-filed return shows that the government owes the taxpayer, it may be too late to collect the money. The good news is that the taxpayer will not be penalized for late filing and late payment, and will not be assessed interest. But the bad news is much worse. 

If the return is filed after the statute of limitations has run out, the government wins and the taxpayer loses. Normally, the time for filing a return and obtaining a refund of an overpayment runs out 3 years after the return was due. That is sometimes referred to as the statute of limitations. 

The point is that a 2005 individual tax return must be filed by this coming April 15th. It would be wise to send it certified mail to be sure that you get proof that it is received timely by IRS. 

If you need help getting your return done, please contact me at 216-621-1120. But, Hurry !!!!

www.wddcpa.com

Cost Segregation for Real Estate Investors

I just attended a webinar on Cost Segregation which can provide tax savings in the early years of ownership of a property.

Cost Segregation is a strategic tax savings tool that allows companies and individuals, who have constructed, purchased, expanded, or remodeled any kind of real estate to increase cash flow by accelerating depreciation deductions and deferring federal and state income taxes.

What are the benefits of a Cost Segregation Study?

Generates immediate increase in cash flow through accelerated depreciation deductions.
Reduces income taxes and can also reduce real estate property taxes.
Provides an easy opportunity to claim ‘catch up’ depreciation on previously misclassified assets (you may be able to deduct depreciation that was not taken in the years you have already owned the property).
Provides an independent third-party analysis (engineering study) that will be available to withstand IRS review.

Contact us at 216-621-1120 if you would like to determine if your property is a good candidate for a Cost Segregation study. We can arrange to have this study performed for you which might lead to significant tax savings.

www.wddcpa.com for your real estate tax and accounting needs

Abbreviation Expansion Presentation I Gave in September, 2000

I just came across the following announcement for a presentation I gave in September, 2000. It was associated with my profile on ZoomInfo. It's amazing how the internet retains information and then organizes it. ZoomInfo is a recent creation, yet it picked-up this newsletter article from years ago.

The presentation I gave pertains to a great productivity tool that I use in writing. With it, a minimium number of keystrokes produces much, much more on the screen. It expands a user-defined abbreviation (that I previously set-up) into a word, phrase, paragraph, or document that was associated with the abbreviation. I have even developed creative ways to use the software that go way beyond the basics of the program. I use this software in every application that I use. It even checks my spelling in every application, therefore, I'm not limited to the spell checking when I'm using MS Office. I turn off the spell checker in MS Office.

If you are interested in learning more about abbreviation expansion, or speedwriting, and this software, please send me an email to RapidWriter123@gmail.com

Greater Cleveland PC Users Group Web Page - [Cached Version]
Published on: 1/31/2001 Last Visited: 7/19/2002

Please welcome GCPCUG members Dave Pfeil, H.F.E.S, president of Ergonomically Correct LLC, and Bill Deutchman, CPA, who together have volunteered their time and energy to present a program on these compelling topics.
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Bill will point out why a utility program that expands user defined abbreviations can be a valuable input tool, especially when other technologies such as voice recognition or scanning aren't feasible, practical, or accessible.

Abbreviation expansion can also be helpful for people with physical impairments who use a keyboard with difficulty, or for keyboarders who type using the hunt & peck method. Bill calls the use of a tool such as abbreviation expansion "working smarter, not harder" and has adopted the motto "save time, save torque"; he points out that reducing keystrokes also helps minimize computer stress injuries. Bill will offer strategies for users at different levels -- light, heavy, and power -- and he'll share suggestions for remembering abbreviations.

At our September 9th general meeting, count on gaining information to help you feel more comfortable at the keyboard and more productive with your computer, both for work and play.Please enjoy your Labor Day weekend, and then plan to join us on Saturday, September 9th, 2000!

Copyright © 2000 GCPCUG.

www.wddcpa.com for your tax and accounting needs

Take a Load Off and Feel Better !!!

You know who you are. You haven't filed tax returns for several years. It makes you uncomfortable, you're stuck in quicksand and you can't get motivated. Sound familiar?

One big step in removing this weight from your shoulders is to make an appointment with a tax preparer. Many preparers will give you a tax organizer for each tax year which will guide you in gathering your information. A tax preparer will provide other assistance if needed.

Then, give your organizers and any necessary tax documents to your preparer and let the preparer do the rest.

Waiting too long to file a return can have detrimental consequences. A big one is that if a refund is expected and the statute of limitations has run (usually 3 years from the due-date of the return), it will be unavailable. Lost! (not the reality TV show) Ouch !!!!

Let me know if I can help. A short introductory phonecall won't cost you a dime because it is complementary. Let's talk !!!

William Deutchman, CPA
www.wddcpa.com
216-621-1120

A Comp or Not A Comp .. That is the Question

Buyers of single family homes, whether investor or homebuyer, often check for recent market sales of comparable houses. Ideally, a comparable would be an identical house, on the same size lot, probably located next door, in the same condition, same landscaping, same interior decoration, etc. In the real world, though, that doesn't happen.

But, there is still a way to use information acquired from various sources and make dollar adjustments to account for the differences between the recent sale and the property being considered for purchase, often referred to as the "subject."

Be careful, though. If the reported sale amount is not a good measure of value, any adjustments to that amount for the differences between the properties are meaningless. The following are just a few examples:

1) a property acquired by the lender through foreclosure; that price doesn't represent a sale

2) a property acquired from relatives is not an arms-length transaction and may be for less than fair market value; this won't be obvious when the last names of the sellers and buyers are different

3) even if the property appears to be very similar on the outside, significant differences might exist on the inside that influenced the price that was paid for that property; it's often said that kitchens and bathrooms sell houses, so consider that if the house had completely remodeled kitchen and bathrooms it would likely sell for more than a house that had it's original kitchen and bathrooms

www.wddcpa.com for your real estate investor tax preparation and accounting needs

CPA ... Sooner is Better

Qualifying for a loan is much harder than it was before the subprime crisis. That's not news.

When you seek a loan, whether from a conventional, hard money, or private lender, you should expect that the lender will be more careful than in recent years. Now, lenders are demanding more and better information as part of their increased level of due-diligence. When you have to provide your tax returns in support of your loan application, you will be better off when you are able to provide tax returns prepared by a CPA, and have a CPA who can provide other requested information.

What this means to you as an investor is that you have should have an accountant on your team. Successful investors have accountants who are experienced in real estate. When you start your real estate business you should pattern it after the business model of a successful investor. It just makes sense.

If there is any doubt in your mind, any temptation to wait, you should try to visualize how you how you will be perceived and your loan application will be evaluated by the loan committee. If you don't like what you see, then find the kind of CPA you need to prepare your tax returns. The sooner, the better.

Live From New York, it's ... Alan Greenspan

A couple of nights ago, I had the privilege of attending a live interactive interview of Alan Greenspan, the recently retired Chairman of the Federal Reserve Bank. In my case, "interactive" meant that he was in New York and I was watching it on a large screen in Cleveland.

His length of service as chairman is impressive in that it lasted more than 18 years, during which time there were four presidents, not all of the same party. He talked about his working relationships with them.

He was interviewed by Andrea Mitchell, the journalist, who is also his wife. She was very professional in asking tough questions, but there was the occasional exchange between spouses that caused them and the audience to laugh.

The event had been scheduled a while ago, but it happened just as his book was released, and coincidentally, occurred on the evening of the day during which his successor, Ben Bernanke, cut the federal interest rate by 50 basis points. He's making appearances on TV because of the book, but the interview I saw lasted for an hour and a half, during which time so many subjects were discussed.

His life, prior to becoming interested in economics, is fascinating. Once he gave up being a professional musician, however, he established himself over the years to eventually advise Presidents Nixon and Ford. Hearing him describe the personalities of these men as an insider provided information not generally known about them. All of that was before taking over the Federal Reserve Bank.

The topics of discussion were of particular interest when talking about why decisions were made and whether he thought that they stood the test of time. One topic of current interest is the problem resulting from subprime mortgages and how it has disrupted the real estate market. He explained that what the Fed decided didn't cause the abuses that lead to many of the problems with these loans. These problems were caused by others.

He gave an opinion on the war. He also discussed the future, including his serious concerns about the ability of the government to keep it's promises to the large numbers who will be retiring in the coming decades, particularly Social Security and Medicare.

www.wddcpa.com for your real estate investor tax preparation and accounting needs