>> GOOD EVENING EVERYONE, WELCOME TO "ASK THE SPECIALISTS", WE HAVE ASKED THE CP A's, GET YOUR TAX QUESTIONS TOGETHER.

AND AFTER A BRIEF BREAK WE'LL GET STARTED ON THE SHOW.

[ ] >> WELCOME BACK EVERYONE, WE HAVE TWO BRANDS NEW PROFESSIONALS, PAUL TRUMAN, JOHN CRAWLEY, THE B AND B SHOW TONIGHT.

>> YES.

>> WHY DON'T YOU GUYS GIVE US A SYNOPSIS AND OVERVIEW ABOUT YOURSELF AND WE'LL JUMP INTO QUESTIONS.

>> I'M JOHN CRAWLEY, A CPA.

I'VE BEEN A CPA FOR 10 YEARS AND STARTED MY CAREER IN A LARGE FIRM.

AND HAVE BEEN BACK ABOUT FIVE YEARS HERE.

>> FALL.

PAUL.

>> I'M PAUL TRUMAN, I'M A CPA.

I'VE BEEN HERE SINCE I GOT OUT OF THE COLLEGE.

THIS IS MY 19th TAX SEASON, BEEN CERTIFIED FOR THE LAST SIX YEARS, AND, YES.

>> IT'S BEEN ANOTHER QUIET TAX SEASON, LIKE LAST YEAR.

THINGS HAVE HAPPENED RECENTLY, THERE HAS BEEN BIG NEWS, WHY DON'T WE SHARE THAT.

>> THERE IS THE RECENT AMERICAN RESCUE PLAN ACT.

THAT CHANGED A LOT OF TAX LAW, AND CHALLENGED TAX LAW FOR 2020.

FOLKS WITH UNEMPLOYMENT FOR 2020, UP TO 10,200 WILL NOT BE TAXABLE ON THE 2020 TAX RETURN.

SOME MAY HAVE FILED.

THE I.R.S.

IS SAYING DON'T FILE AN AMENDED RETURN, WE'LL FIGURE OUT WHAT THE DIFFERENCE IS AND SEND IT BACK TO YOU.

WHEN THAT IS... >> NOBODY KNOWS, RIGHT.

>> SO THAT WAS A BIG CHANGE TO AFFECT MAYBE A LOT OF VIEWERS HERE TONIGHT.

AND YOU KNOW THERE'S A TONNE IN THAT PACKAGE, BUT THAT IS THE BIG ONE.

>> THE BIGGEST THING FOR 2020 IS THE UNEMPLOYMENT EXCLUSION, AND TWO THINGS TO REMEMBER IS THE A G.I.

THRESHOLD.

THE ADJUSTABLE THRESHOLD, IT'S A LITTLE DIFFERENT.

THE SAME FOR INDIVIDUALS, SINGLE FOLLOWERS.

FOLLOWERS THAT SEPARATE.

THERE ARE THINGS YOU CAN LOOK AT.

IF YOU ARE A JOINT FILER, FILE MARRIED FILING SEPARATELY.

THERE'S THINGS YOU CAN DO TO LOOK AT.

PART OF THAT PACKAGE DOVE INTO 2021 AS WELL.

YOU HAVE DAYCARE BENEFITS WENT UP.

YOU HAVE MORE STIMULUS MONEY FOR THE INDIVIDUALS, TAX CREDITS FOR HEALTH INSURANCE.

>> HOW ABOUT THE FILING DATE THAT HAS BEEN CHANGED TOO.

THEY MOVED THE GOAL POSTS A LITTLE ON THAT.

>> NOW WE HAVE AN EXTRA MONTH.

LAST YEAR WAS THREE MONTHS, ONE EXTRA MONTH UNTIL MAY 15TH TO FILE A RETURN OR EXTENSION.

THE STATE AGREED TO EXTEND THAT, THE STATE DATE.

YOU HAVE AN EXTRA MONTH TO FILE YOUR RETURNS IF YOU HAVEN'T.

UNTIL MAY 15TH.

>> I WANT TO REMIND EVERYONE, THAT WE ARE TAKING CALLS, PHONE NUMBER ON THE SCREEN, THEY ARE DOING THINGS WITH SOCIAL MEDIA, WE INVITE EVERYONE TO PARTICIPATE AS MUCH AS THEY CAN.

>> LET'S START WITH A FEW QUESTIONS THAT WE HAVE HAD.

IT USED TO BE THAT PEOPLE DIDN'T WORRY ABOUT ITEMIZING THE DEDUCTIONS, A LOT OF FOCUS.

NOW THERE'S A TWEAK IN THERE.

ONCE YOU BRING YOURSELF TO SPEED ON THAT.

>> FOR 2020, EVEN IF YOU DON'T ITEMISE YOUR DEDUCTIONS, YOU ARE ELIGIBLE FOR A $300 ABOVE THE LINE TAX DEDUCTION ON THE TAX RETURN.

IT'S A NICE LITTLE EXTRA DEDUCTION THAT THEY ARE GIVEN FOR THIS YEAR, THEY WANT HIM TO - PEOPLE TO GIVE TO CHARITIES, AND TAKE ADVANTAGE OF THAT.

>> CASH.

>> CASH CONTRIBUTION.

>> CAN'T BE CLOTHES TO GOODWILL, THESE BE A CASH DONATION, AND THAT ALSO INCREASED FOR 2021 AS WELL, IT'S NOW UP TO $600.

IT'S A GREAT, YOU KNOW, YOU GIVE YOUR CHURCH OR ORGANIZATION TO GET A TAX DEDUCTION NOW THAT MOST PEOPLE DON'T ITEMISE.

>> LET'S TALK ABOUT THE STIMULUS PAYMENTS.

WE HAVE A THIRD ONE COMING OUT.

WE ARE HAVING TO DO RECONCILIATION ON THE RETURN.

WE ARE ACTING CLIENTS ABOUT IT.

DO YOU WANT TO TELL US A BIT ABOUT THE REPORTING.

YES, IT'S FUNNY, I GET THE QUESTION A LOT.

I ASK PEOPLE DID YOU RECEIVE YOUR STIMULUS, HOW MUCH DID YOU RECEIVE.

AND THEY SAY WAIT A SECOND, IT'S NOT SUPPOSED TO BE TAXABLE.

IT'S NOT.

THE REASON WHY WE ARE ASKING FOR THAT, IF YOU DIDN'T GET THE STIMULUS, AND YOU WERE UNDER THE INCOME THRESHOLD WHEN YOU FILL YOUR TAX RETURN, YOU'LL GET THAT WITH YOUR NORMAL TAX RETURN, IT WILL BE PAID OUT RIGHT THERE.

>> AS PART OF YOUR REFUND.

>> THAT'S WHY WE ARE ASKING FOR THAT.

WE SEE A LOT OF FOLKS TAKING ADVANTAGE OF IT.

IF YOU SOME PEOPLE HAVE NOT RECEIVED IT YET.

IF YOU DON'T GET THAT, IT WILL BE SAME DEAL NEXT YEAR, YOU TAKE THAT STIMULUS.

>> IF YOU ARE 2021.

MAYBE DON'T QUALIFY FOR 2020.

IF YOUR INCOME LAPSE, YOU'LL GET THAT ONE.

IT'S ALL CONFUSING, IT SOUNDS LIKE NUMBER THREE IS AVAILABLE IN YOUR INCOME DROPS FOR THE NEXT YEAR.

>> RIGHT.

>> THERE'S ALL SORTS OF SCENARIOS.

>> THERE WAS A CHILD IN 2019.

WE ARE GETTING BACK FOR THEM AS THEY SPEAK.

AND A CALLER.

A LITTLE CONCERNED ABOUT CAPITAL GAIN RATES AND HOW THEY MAY CHANGE UNDER THE BIDEN ADMINISTRATION.

TALK A BIT ABOUT WHAT HAPPENS WHEN YOU SELL A RENTAL.

HOW IS THE GAME CALCULATED.

AND WHETHER OR NOT IF THEY SOLD IT NOW, BEFORE ANY TAX OR CHANGES, MIGHT THEY BE GRANDFATHERED.

>> I DON'T THINK - I AM NOT AWARE OF IT BEING GRAND FATHERED INTO THE GAMES, BUT, YES, IF YOU DO HAVE A RENTAL, YOU ARE ABLE TO GET SOME TAX ADVANTAGES AT SOME LOWER RATES WITH THE CAPITAL GAINS.

THE LAND ITS ON.

PART OF THE PROCEEDS GO TO LAND.

IT'S TAXED AT A LOWER RATE.

SOME MAY NOT BE TAXED AT ALL.

ANYTHING THAT YOU DEPRECIATE.

THE BUILDING THAT IS SUBJECT TO THE MAX RATE AT THE 25%.

THERE IS LOWER TAX RATES THAT PLAY IT.

I THINK, YOU KNOW, A LOT OF FOLKS ARE WORRIED ABOUT THE TAX, THE CAPITAL GAINS RATES GOING UP UNDER THE BIDEN ADMINISTRATION, BUT I THINK FOR MY UNDERSTANDING, THE PLAN IS IT'S ONLY GOING TO GO UP IF YOU ARE OVER A MILLION EVER INCOME.

SO IF YOU ARE UNDER THAT MILLION DOLLARS, THEN, YOU KNOW, AS OF RIGHT NOW THE PLAN IS TO KEEP THE CAPITAL GAINS RATES AS THEY ARE FOR THOSE PEOPLE.

>> A QUICK SWING BACK HERE FROM BAY CITY.

WE ARE TALKING ABOUT THE UNEMPLOYMENT EXCLUSION, AND SO THEY ARE SAYING I HAVE TAXES WITHHELD.

WILL THEY GET THAT MONEY BACK.

>> CORRECT.

>> THEY WILL.

>> THAT'S - THAT'S YOUR MONEY.

>> YES.

>> AND WITHHELD.

WHEN YOU SEE THE RETURN, IT ALL WORKS OUT.

THAT MONEY WILL COME BACK TO YOU.

>> SOCIAL MEDIA.

SAYS HOW MUCH CASH PER YEAR CAN A PARENT GIVE WITHOUT ANY KIND OF A GIFT TAX REPORTING.

>> SO, IT'S $15,000 RIGHT NOW PER PERSON.

SO IF YOU HAVE A HUSBAND AND A WIFE.

AND HAVE YOU TWO KIDS, YOU CAN GIVE - THE HUSBAND CAN GIVE $15,000 TO ONE KID, AND THE SAME FOR THE NEXT CHILD AS WELL.

>> UP TO $30,000 PER CHILD.

IN MOST CASES THAT'S JUST REPORTING, OKAY.

THE BIGGER PICTURE AND LARGE STATE TAX EXCLUSION.

IF YOU HAVE A CLIENT THAT WANTS TO GIVE A LARGER GIFT.

IT'S NOT TABOO TO DO THAT.

>> NO, YOU JUST HAVE TO REPORT IT TO THE GOVERNMENT.

>> THERE'S NO CASH INVOLVED.

YOU ARE LOADING PART OF YOUR EXCLUSION.

>> DIRECT.

>> YES.

>> I'M - CLIENTS WILL BE FEARFUL OF THAT, THEY NEED TO DO WHAT IS RIGHT FOR THE FAMILY IN THE FAMILY SITUATION.

>> YES.

>> YOU HAVE TO TALK ABOUT WE ARE GIVING THEM MONEY AND GIVING IT BACK.

IF YOU GET A GIFT OR INHERITANCE, WHAT MAY BE TAXABLE AND WHAT NOT.

>> IF YOU RECEIVE CASH FROM AN INHERITANCE - THAT'S NOT GOING TO BE TAXABLE.

IF YOU RECEIVE - IF YOU RECEIVE PROPERTY FROM AN INHERITANCE, YOU'LL GET THE STEPPED UP BASIS OF THAT AT THE DATE THAT IT PASS, SO LET'S SAY YOU INHERIT A $300,000 HOUSE, IT'S WORTH $300,000 ON THE DAY YOU INHERITS IT.

IF YOU SOLD IT FOR $300,000, YOU WOULD HAVE NO TAX CONSEQUENCES.

IF YOU HOLD IT AND SOLD FOR $350,000 DOWN THE ROAD.

YOU'D HAVE A TAX LIABILITY ON THE DIFFERENCE BETWEEN THE SALES PRICE AND THE FAIR MARKET VALUE WHEN YOU INHERITED IT.

>> IT'S KIND OF CRAZY, THE LAST TWO QUESTIONS WE HAVE - FIRST OF ALL, RECEIVING LIFE INSURANCE PROCEEDS INHERITED BENEFICIARY, THAT TAXABLE?

>> NO, IT IS NOT.

>> OKAY.

HOW ABOUT THE ANNUITY.

SOMEONE IS INHERITING AN ANNUITY, WILL THAT BE TAXABLE A.

IF SO, THE QUESTION IS HOW MIGHT THEY REDUCE THEIR TAXABLE INCOME.

MIGHT TAKE A CRACK AT ANNUITIES.

>> I WOULD HAVE TO LOOK INTO THE ANNUITY A LITTLE MORE.

>> COULD BE TAXABLE.

I HAD ONE PREPARED.

AND I WAS TOLD.

HERE IS THE GHOST AMOUNT.

THAT'S WHAT I FACTORED IN.

WE KNEW WHAT THEY WERE DOING.

WE FACTORED THAT IN.

NOT ALL OF IT WAS TAX.

>> MY UNDERSTANDING IS THAT THE OWNER WHO HAD INHERITED.

YOU HAD THE COST BASIS, IF THEY PUT MONEY INTO IT.

YOU ARE NOT GOING TO PAY TAX.

IT'S A TRICKY ASSET.

LIKE AN ANNUITY, IF THERE'S A BUILT-IN PROFITS OR INCOME, YOU WOULD PAY TAX ON THAT IF YOU CASH IT IN.

I WOULD BE CAREFUL WHEN YOU INHERIT CERTAIN EXPECTS WHETHER IT WOULD BE RETIREMENT.

ANNUITIES, TALK TO SOMEONE, GET INFORMATION BEFORE YOU RUN OUT AND FILL IN THE FORM AND SAY I WANT TO CASH THIS IN.

YOU MAY HAVE A SURPRISE ON THE TAXATION AND THERE MAY BE A WAY TO STRATEGIZE AND GET RID OF INHERITED ASSETS HERE.

>> HOW DOES SELF-EMPLOYMENT TAX WORK, IS A QUESTION HERE.

WHAT IS A SELF-EMPLOYMENT TAX?

>> SELF-EMPLOYMENT TAX IS GENERALLY PEOPLE, WHEN YOU GET PAID, YOU PAY HALF THE SELF-EMPLOYMENT DARK, AND YOUR EMPLOYER.

THE TOTAL TAX IS 16.3%, AND YOU PAY 7.65 A AND YOUR EMPLOYER PACE 7.65.

IF YOU ARE SELF-EMPLOYED YOU ARE ON THE HOOK FOR 15.3%.

IF YOU - WHEN SOMEONE SAYS I ONLY MADE $12,000 AND A STANDARD DEDUCTION OF $12,000, BUT YOU HAVE SELF-EMPLOYMENT TAX.

IT CREATES ON THE INCOME BEING SELF-EMPLOYED.

>> IT ADDS UP WHEN YOU HAVE THE SOCIAL SECURITY, AND INCOME TAX.

THE NUMBERS CREEP UP, AND IT'S ALARMING HOW MUCH TAX IS PAID ON BUSINESS PROFITS.

>> OF COURSE, AND A LOT OF TIME WHEN CONTRACTORS WHO ARE SELF-EMPLOYED, THEY GET THE MONEY IN, AND IF THEY WERE AN EMPLOYEE IN THE PAST.

AND A NEW BUSINESS OWNER, THEY DON'T FULLY UNDERSTAND THE AMOUNT OF TAX THAT THEY NEED TO PUT IN THEIR POCKET.

PUTTING IT ASIDE.

THEY ARE PUTTING IT ALL IN THEIR POCKET AND DON'T UNDERSTAND THE TAX RAMIFICATIONS OF IT.

IF YOU ARE GOING MAKE SELF EMPLOYMENT INCOME, AND IT'S YOUR FIRST YEAR, YOU WANT TO GET WITH A CPA AND PLAN FOR WHAT YOU ARE PAYING QUARTERLY.

>> SURE, THE QUESTION THEN, DID NOT FILE TAXES LAST YEAR, HAD NO INCOME.

THEREFORE I DID NOT GET STIMULUS MONEY.

IF SHE FILES THIS YEAR, WILL SHE GET LAST YEAR AND THIS YEAR'S STIMULUS MONEY.

>> YES, SHE WILL, IF SHE'S UNDER THE THRESHOLD.

YOU WOULD GET THE FIRST AND SECOND STIMULUS MONEY AS PART OF A REFUND ON THE 2020 TAX RETURN.

>> THE FIRST ONE CAME OUT LOOKING AT THE 2019 RETURN.

OR WHAT YOU DID IN 2018.

>> IF YOU HAVEN'T FILED FOR A FEW YEARS, THEY DON'T KNOW MUCH ABOUT YOUR FINANCIAL SITUATION.

DEFINITELY FILE A RETURN TO EVEN IF THERE'S NO TAXES JUST TO GET THE STIMULUS MONEY BACK.

>> I KNOW WE TALKED BESIDE SELF-EMPLOYED INDIVIDUALS, AS PART OF THE NEW ACT THAT CAME OUT, WAS THE P.P.E.

ON THE PAY CHECK PROTECTION PROGRAMME.

AND IT HELPED WITH SELF-EMPLOYED INDIVIDUALS THAT DIDN'T PLAY.

IT'S BASED ON GROCERY RECEIPTS.

IF YOU DIDN'T TAKE ADVANTAGE OF P.P.E.

IN ROUND ONE, MAYBE YOU SHOULD CONTACT THE CPA ABOUT FIGURING OUT WHAT YOU COULD GO FOR.

>> WHEN WE SAY LOAN, WE MEAN A FORGIVABLE LOAN, BASED ON YOUR GROSS PROFIT.

MEETING REVENUE AND COST OF FOODS.

AND, YOU KNOW, THERE'S A FORMULA THAT YOU TAKE THE AVERAGE MONTHLY, IN THIS CASE GROSS PROFIT.

AND 2.5 TIMES THE AMOUNT.

AND THAT'S THE AMOUNT YOU COULD QUALIFY FOR A PAYCHECK PROTECTION LEAN.

>> WITH THAT, THERE'S A BIG CHANGE.

THE FIRST GO AROUND AN INTERPRET USING NET PROFIT.

IF YOU HAVE A BUSINESS THAT IS YOUR LOSS, YOU COULDN'T GET A PPP LOAN, NOW THEY ARE USING GROSS INCOME THAT COULD BE HUGE, UP TO 100,000.

THAT'S A HUGE CHANGE FOR SELF-EMPLOYED FOLKS AND FARMING CLIENTS THAT USE A SCHEDULE.

I ENCOURAGE FOLKS, BANKS HAVE TO BUILD, BUT IT'S A BIG DEAL FOR THOSE THAT ARE SELF-EMPLOYED AND GOT A PPP LOAN THE FIRST TIME.

>> THE DEADLINE WAS SUPPOSED TO EXPIRE IN MARCH.

AS FAR AS I KNOW IT WILL BE EXTENDED AND THERE'S MONEY FOR THE PPP LOANS.

>> THEY WERE TALKING ABOUT THEY ARE PROJECTED FOR THE MONEY TO RUN OUT BY THE END OF APRIL.

IT WAS EXTENDED BY THE END OF MAY.

I DON'T THINK YOU WANT TO WAIT UNTIL THE END OF MAY.

>> OBVIOUSLY FOR FOLKS THAT ARE CASH STRAPPED I WOULD GET GOING AS SOON AS POSSIBLE.

RECEIVED AN INHERITANCE OF A HOME SALE OF LESS THAN $100,000, IS THAT TAXABLE.

INHERITANCE.

YOU TALKED EARLIER THAT PROCEEDS FROM A HOUSE WOULD NOT BE TAXABLE.

>> IT WAS IN THE OWNERS HANDS AND THEY STEP UP.

WHAT ABOUT HOME SALES IN GENERAL.

PEOPLE ARE I'M GOING TO SELL MY HOME.

DO I PAY TAX ON THAT.

>> THIS QUESTION HAS COME UP MORE THAN ONCE.

THE VALUES OF HOMES HAVE GREAT I GONE UP RECENTLY.

I HAD A CLIENT - THE GAIN EXCLUSION AMOUNT IS $250,000 FOR A SINGLE AND $500,000 FOR A MARRIED OR JOINT COUPLE.

I HAD A COUPLE OF INSTANCES WHERE THE TAXPAYERS HAD A GAIN LARGER THAN $500,000.

IF THAT'S THE CASE, IF YOU LIVED IN THE HOUSE FOR MORE THAN 2-5 YEARS, YOU CAN EXCLUDE UP TO $500,000.

IF IT'S MORE THAN 500,000, YOU CAN PAY TAX ON THE $100,000.

MUST BE A GOOD CLIENT TO HAVE THAT BIG OF A GAIN.

YOU WOULD BE PRETTY GENEROUS, WE DON'T SEE TOO MANY TAXABLE HOME SALES, THIS IS YOUR PRIMARY RESIDENCE, YOUR SECOND HOME, THAT EXCLUSION DOES NOT APPLY FOR THE LENGTH OF THE COTTAGE.

>> CBA, MAYBE YOU CAN GET PROPER PLANNING AND MAKE THAT HAPPEN.

WE'LL GET TO THAT SOME OTHER TIME.

>> I HAVE A TEACHER CALLING IN.

WORKING VIRTUALLY AT HOME.

A PRINTER AND A COMPUTER.

CAN SHE CLAIM IT ON HER TAXES.

SOUNDS LIKE WE HAVE A TEACHER EMPLOYEES WITH BUSINESS EXPENSE, WHAT DO YOU THINK?

>> THERE'S THE EDUCATOR EXPENSE DEDUCTION, AND IT'S 250.

IF YOU ARE A TEACHER, EDUCATOR, AND PAY ANYTHING OUT OF POCKET.

YOU CAN DEDUCT UP TO 250 ON THE TAX STREAM.

>> FOR MOST EMPLOYEES, IF THEY ARE WEREN'T A TEACHER, JUST SOME OTHER EMPLOYEE, I GET THIS QUESTION A LOT.

HEY, I'M WORKING FROM HOME.

CAN I DEDUCT THE HOME OFFICE.

GENERALLY YOU CAN'T DO THAT.

WITH THE 2018 TAX FLOOR, IT TOOK AWAY A LOT OF EMPLOYEE EXPENSE, TEACHERS HAVE A LITTLE EXTRA WHERE THEY GET THE $250 IN ABOVE THE LINE, GENERALLY IT'S A NO FOR THOSE KIND OF EXPENSES.

>> QUESTION FROM FRANKFURT.

IF I PAY OFF MY MORTGAGE WILL I LOSE MONEY ON MY RETURN BASED ON THE INCREASE IN TAXES BECAUSE I'M NOT ITEMISING.

HOW DOES MORTGAGE INTEREST PAY INTO ITEMIZING DEDUCTIONS FOR FOLKS.

>> IF YOU ITEMISE YOU TAKE THE MORTGAGE INTERESTS, MOST INDIVIDUALS DON'T ITEMISE ANY MORE BECAUSE YOU FACTOR IN YOUR TAXES, YOUR PROPERTY TAXES, STATE HOLDING, MORTGAGE INTERESTS.

IF YOU PAY IT OFF EARLY, YOU DON'T GET THE POTENTIAL DEDUCTION.

MOST PEOPLE DON'T ITEMISE TO QUALIFY FOR THE MORTGAGE CENTER DEDUCTION.

>> WE GET PEOPLE TALKING ABOUT BUYING A HOME.

DO THEY PAY OFF THE MORTGAGE.

THE MAJORITY OF FOLKS KNOW THAT YOU ARE NOT LOSING TAX BENEFITS BY PAYING OFF THE MORTGAGE.

>> SELLING PROPERTY FOR $25,000 MORE THAN THEY PAID.

IS THERE ANYTHING THEY CAN DO TO OFFSET CAPITAL GAINS.

>> THEY COULD POTENTIALLY HARVEST LOSSES, IF THEY HAVE A PORTFOLIO WITH UNREALISED LOSS, THEY COULD HARVEST THAT TO OFFSET IT.

THE ONLY WAY TO DO THAT IS TO TAKE A LOSS SOMEWHERE ELSE, IF YOU HAVE SOMETHING WITH A BIGGER BASE THAN WHAT IT IS WORTH.

YOU COULD LOOK AT SELLING THAT.

THAT IS REALLY THE ONLY OPTION THERE.

>> SAYS HERE I OWN A SMALL BUSINESS, HOW DO I CLAIM THE PANDEMIC LOAN ON THE RETURN.

PACK TO THE PPP LOAN, WE DIDN'T TALK MUCH ABOUT GETTING THE LOAN, FORGIVENESS, AND THE PROCESS THERE.

>> WELL, IF ITS A SELF-EMPLOYED INDIVIDUAL, WHATEVER THE LOAN IS, THEY HAVE TO PAY THEMSELVES THAT AMOUNT.

AND SHOW PROOF THAT IT WAS PAID.

AND YOU APPLY TO THE BANK FOR FORGIVENESS.

>> AFTER THAT NO REPORTING ON THE TAX RETURN.

>> CORRECT.

NOT FOR A SELF OF EMPLOYED INDIVIDUAL UNLESS IT'S A BUSINESS OR PARTNERSHIP.

>> TAXES DONE BY A SERVICE, STIMULUS WAS MARKED AS NOT RECEIVED, BUT I GOT IT.

WHAT DO I DO?

THEY GOT THE MONEY, THEY SAID THEY DIDN'T.

SO THE PROGRAMME IS GOING TO CALCULATE - ASSUME THEY DIDN'T.

AND GOING TO APPLY, THE GUESS IS WHAT WILL HAPPEN WHEN THE RETURN GETS INTO THE HOPPER.

>> IT'S A GREAT QUESTION.

I THINK THAT THE I.R.S.

PROBABLY WILL FLAG IT.

THEY'LL HAVE IN THEIR SYSTEM THAT IT WAS PAID AND PROBABLY WILL REDUCE THE INCOME BY THAT AMOUNT AND SEND YOU THE DIFFERENCE, IT'S OBVIOUSLY NEW, KNEW FOR EVERYONE, AND I HAVEN'T RUN ACROSS THAT YET.

>> I SUSPECT IT WILL RECONCILE.

I DON'T THINK THE OTHER REFUND MONEY WILL COME.

IF IT DID, YOU ARE DOING TO - THERE'LL BE OPPORTUNITIES TO PAY THE MONEY BACK.

SAME WITH FOLKS GETTING THE QUESTIONS ABOUT SOMEONE PASSED AWAY.

DO THEY GET THE STIMULUS MONEY, AND THEY - IT'S OBVIOUSLY IF YOU ARE NOT ENTITLED TO THE MONEY, THERE'S A SEVERE MINE FOR KEEPING THE MONEY.

>> FROM FACEBOOK, IT WAS THE OWNER OF FOUR PEOPLE.

THREE OF THEM DIED.

I SOLD IT.

HOW DO YOU CALCULATE MY COSTS BASIS.

>> IT'S WHAT YOU PAID FOR IT.

YOU PERSONALLY PAID FOR YOUR FOR YOUR SIR.

IT WILL BE YOUR COST PLACES AT THE END OF THE DAY.

>> THE THREE FOLKS THAT PASSED.

THAT THEY INHERITED THEIR SHARE, AND HAD TO BUY OUT THE LAST ONE.

THE PARENT WAS 25%.

ON THAT BASIS, IT WILL BE WHATEVER THE FAIR MARKET VALUE IS AT THAT DATE.

THAT THE PERSON HAS: IT WILL BE AN ORIGINAL COST BASIS.

FAIR MARK VALUE, AND WHAT YOU PAY TO BUY OUT THE OTHER PERSON.

COMBINING THOSE TOGETHER.

AND THERE'S THE PROBLEM.

IT'S FOR A LONG PERIOD OF TIME.

IT'S CRITICAL TO HAVE GOOD RECORDS.

WE HAVE A SAYING WHERE MOM INSTEAD OF INHERITING IT, THEY GIFT IT.

WHAT IF SOMEONE GIVES YOU SOMETHING, THEY GIVE YOU STOCK OR THE HOUSE.

WHAT HAPPENS WHEN YOU SELL IT.

>> YOU TAKE THE PERSON'S BASIS THAT GIVED IT TO YOU.

THAT WOULD BE A RELATIVELY POOR TAX PLANNING STRATEGY.

IF YOU SELL THE HOUSE, AFTER THE HOUSE PASS, YOU INHERIT IT AT A LOW MARK VALUE, IF THEY GIFT IT TO YOU YOU HAVE A SPREAD ON THE PORTION.

>> OKAY.

WELL, THAT'S PRETTY MUCH IT.

HALF HOUR BLITZ.

THERE'S QUESTIONS, APOLOGISE WE DIDN'T GET TO ALL YOUR QUESTIONS, WE HAD GOOD ONES, THANK YOU FOR JOINING US.

NEXT WEEK, WE HAVE ASK THE DENTIST.

HAVE A GOOD NIGHT.