IRC Section 165 claim: which form?

I bought $5000 Subordinate Note from AFSI several years ago. They filed ch.11 then ch.7. Now the filing is somewhere between court and some legal firms. I received a letter from someone telling me the section 165 thing and offerred help, not free I am sure. He said sction 165 is very complicated that I must get help from a pro like him. Is this true?

Anyway, any input for this? Thanks.

i have a question.

a coworker was asking me this morning she has her son in jail and she sends him money orders every week and she wanted to know if she can deduct this on her return or claim him as a dependent.

wdsaltman95 said:
However, if you are so inclined, you could consider taking a position that the fees are investment expenses (assuming the income you are earnings is not tax-exempt) and attempt to claim as a miscellaneous deduction subject to the 2% floor. I won't be surprised if "others" here disagree, though.

IMHO, this isn't really far-fetched. Balance transfer fees are interest - they go into the credit card company's own calculation of FINANCE CHARGE (and the APR) - the only unusual part in the case of audit would be that you would have to prove that the money obtained by them was actually used for taxable-interest earning activities. Then the fees would be an investment expense in the same sense as margin interest is. You borrowed, at a fee, and used the money for taxable investment activities.

That said, you'd still have to exceed 2% of your income to make this worth it anyway - that's potentially a lot of BT fees, and by that point, are you really making any money on your investment?

But this whole idea of AORs as a business just seems totally counterproductive. Note to deduction-crazy folks: Not incurring the expense benefits you 3 to 6 times as much as a deduction, most of the time.

I am self employed and have a 100% business use vehicle. The vehicle was put into service in March 2007. If I am understanding the IRS website correctly I can claim either the Section 179 Deduction or Modified Accelerated Cost Recovery System (MACRS) since this is the first year in use. When I plug the numbers into TaxAct the deduction comes out the same using either method. Is there a good reason to use the Section 179 over MACRS?

Thanks for any help!

wdsaltman95 said:
My guess is that vehicle is subject to the passenger auto depreciation limitation. What is the deduction TaxAct calculated -- is it $3,060 or $3,260? If so then it is subject to this limitation regardless of whether you wanted to elect to use 179 or MACRS.

If it's neither of those amounts, then I suppose there is always the slim chance that you've got a business or taxable income limitation issue for purposes of 179 and the limit just so happens to approximate the MACRS deduction. That would be quite the coincedence, but not impossible.

Other than those possibilities, I'm not sure of any other reason that the 179 might be the same as the MACRS deduction. Generally, 179 will result in a larger deduction than MACRS, assuming qualifying property. However, the limitations mentioned above and very expensive (usually short-useful life) assets would be scenarios where 179 might be the same or even less than MACRS.

The amount TaxAct is giving me is $3,060 so it seems to have hit the limitation you mentioned. So I guess if they are both the same I'm safe using either as it makes no difference for my taxes next year?

I just checked my 1098-E form from the US Dept of Education for some federal student loans I have taken out. They have been bungling my payment allocations and have incorrectly reported that I have paid more than $600 in interest charges in 2007. In reality, I have paid zero in interest. Do I need to get this corrected? Since I intend to enter zero for my "student loan interest deduction" (line 33 on the 1040), I don't think I need to refer to the 1098-E. The IRS does receive a copy, though, so will that pose any problems? Will I need to do anything if a corrected copy is ever issued?

Thanks for your help.

-Ted

xixihaha2046 said:I donated many clothes, shoes and bags to Goodwill in Dec. 2007. It's my first time to donate things to Goodwill. I just got a simple receipt with my name, and # of bags on it. So how can I file my tax return? Will I decide how much money those stuff worth by myself? I used big trash bags to hold my stuff. But Goodwill just counted the # of bags. I should smaller bags I guess.Schedule A, Charitable Donations. Yes, you need to assign values to each item. It's best to have an itemized list of each item you donate. The items must be in good condition. If the value is over $500 to one charity, there are additional forms. I use TurboTax...sorry, I don't know the form #s if over $500.

I don't think you can claim them as your dependents. To claim someone your as dependent, you must pass three tests: time lived with you (days this year + 50% last year + 25% year before > 6 months), your support > their income, must be related (parent/child). Please double check for sure. SSN is not a problem. You can get ITIN for them but the question is do they pass the three tests.

I am not a tax professional and the above information is not advise nor considered reliable.

The information should be in the booklet IRS mails to you if you do receive one.

Whatisinyourwallet said:Both of my parents are retired and I pay all of their living expenses. The question is they live in other countries and don't have SSN. Can I still claim them as my dependent? How? Or is there other way I can deduct this expense?

xixihaha2046 said:I donated many clothes, shoes and bags to Goodwill in Dec. 2007. It's my first time to donate things to Goodwill. I just got a simple receipt with my name, and # of bags on it. So how can I file my tax return? Will I decide how much money those stuff worth by myself? I used big trash bags to hold my stuff. But Goodwill just counted the # of bags. I should smaller bags I guess.

I did the same thing. First time for me, too.

I don't know how to quantify or qualify this. Lots of clothes, too. I'm not sure if there's some forumla or something we can use.

faw169 said:To claim someone your as dependent, you must pass three tests: time lived with you (days this year + 50% last year + 25% year before > 6 months), your support > their income, must be related (parent/child). Please double check for sure. SSN is not a problem. You can get ITIN for them but the question is do they pass the three tests.Ouch.

First of all, a dependent MUST be a U.S. citizen, a U.S. resident, a resident of Canada or Mexico, or certain American Samoan or Northern Mariana Island residents. If the parents don't have social security numbers because they are none of those, they can't be dependents.

Second, your parents, like other close relatives, do NOT need to live with you to be your dependents.

The fact that they are married would be a problem, if they were filing a joint U.S. return, but presumably they aren't filing any.

But their income would have to be very limited, under $3400 with certain exceptions.

This is all explained clearly in IRS Publication 17.