Speaker 1: Repairs on the earlier down poll from the heavier winds
Speaker 1: earlier today that ended up blocking that road at Walnut Street.
Speaker 1: So those heavy winds did in fact affect the roads
Speaker 1: all day. Right now though everything does seem to be
Speaker 1: moving along just fine. Let's go to the downtown upper
Speaker 1: and lower decks at ninety three. Look good, Zacmbridge all
Speaker 1: wide open. Both directions upper and lower decks of ninety three,
Speaker 1: like I said, are wide open. The Leveret up and
Speaker 1: down ramps are good. Stuo drive. No problems there. On
Speaker 1: the pike. You should be good out west heading out
Speaker 1: to Natick. Everything looks good in the south of town.
Speaker 1: Twenty four Route three ninety five all good along the
Speaker 1: south shore and four ninety five no problems right now
Speaker 1: between Foxborough and as you make your way down towards Bourne.
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Speaker 3: Here's the fourty WBZ and you weather forecast.
Speaker 4: And I will be windy and cold, still under a
Speaker 4: partly cloudy sky. Low t upature around thirty two, but
Speaker 4: the wind gusts will not be as high as they
Speaker 4: were earlier. Tomorrow's still going to be a blustery day,
Speaker 4: whens gusting thirty to forty miles per hour and all
Speaker 4: add a chill to the air, despite sunshine and some clouds.
Speaker 4: I forty three Tomorrow and accub with the real field
Speaker 4: tempatures mostly in the twenties, mainly clear, brisk and cold Tomorrow,
Speaker 4: night lows in the mid to upper twenties. Still the
Speaker 4: chili breeze Sunday, but not even as much of a
Speaker 4: factor as tomorrow. Partly Sunday. Sunday a high forty two
Speaker 4: and early clouds given what a sunshine. Monday a high
Speaker 4: of forty seven and highs get into the fifties on Tuesday.
Speaker 4: I'm accub with the bed relatis Brian TOMPs a WBZ
Speaker 4: Boston's news radio.
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Speaker 8: Well, let's get back to Nightside with Dan Ray. I'm
Speaker 8: Al Griffith WBZ Boston's News Radio.
Speaker 3: It's night Side with Dan Ray. I'm WBZ Costin's Radio.
Speaker 8: Thank you very much. Al Griffin. Here on a Friday
Speaker 8: night and a little after nine o'clock as we head
Speaker 8: towards the midnight hour weekend. Beckons, we'll get you all
Speaker 8: the way till it is about eleven fifty eight. We
Speaker 8: have an interesting program lined up and we have delighted
Speaker 8: to have back as a guest, Mark Misselbeck. Mark is
Speaker 8: a CPA. He's been doing this work for a few years.
Speaker 8: I'm not going to ask him how many, but believe me,
Speaker 8: he's as good as there is. Mark, Misslbeck, welcome back
Speaker 8: to Nightside.
Speaker 7: How are you well? Thank you for the ability to
Speaker 7: present to the public.
Speaker 8: Well, I'll tell you, I think we've figured this out.
Speaker 8: This is probably the fifteenth year that we have done this.
Speaker 8: We've been doing the show for seventeen and a half years,
Speaker 8: and you are now with a major firm. You've been
Speaker 8: with a major firm your entire career. This one is
Speaker 8: Cherry Cherry Beckheart Advisory LLC out of Waltham. Will be
Speaker 8: more than happy to give that address and how people
Speaker 8: can get in touch with you. You're not looking for work.
Speaker 8: You've done this and generally we do it twice a year.
Speaker 8: We did it I think it was the day before
Speaker 8: Valentine's Day in February, February thirteenth and Basically people call
Speaker 8: up with all sorts of different questions and you're not off.
Speaker 8: Amazes me, You've been doing this how many years? Unless
Speaker 8: you don't want to date the specific over four decades?
Speaker 7: Would you say, I'm working on fifty three years?
Speaker 8: Okay? Pretty direct? And did you go to school for this?
Speaker 8: Up here? I've never really asked you this in the air.
Speaker 8: I just wanted to kind of make people know where you're,
Speaker 8: where you where you learned everything that well, of course,
Speaker 8: this is your career, your your subject is that you
Speaker 8: have to learn stuff every year when the when the
Speaker 8: tax code has changed. But where did just where did
Speaker 8: you start off? At a collegiate level.
Speaker 7: I took my Bachelor of Science degree in accounting at
Speaker 7: the University of Connecticut in Stores. I then spent five
Speaker 7: years with the I R. S on the other side
Speaker 7: of the table, auditing, and later on I got my
Speaker 7: master's degree at the University of Hartford.
Speaker 8: All right, Hartford, by the way, has a few A
Speaker 8: couple of guys on the Red Sox played at the
Speaker 8: University of Hartford. I don't know how much of a
Speaker 8: baseball fan you are, but a kid they just picked
Speaker 8: up who had been a picture with the Braves, and
Speaker 8: so there's a there's a couple of players from from
Speaker 8: your old school who are who might be might be
Speaker 8: on the Red Sox this year. But we're not here
Speaker 8: to talk baseball. We're here to talk taxes. Even though
Speaker 8: taxes arrives the same month as baseball, April, taxes are
Speaker 8: something we all have to worry about. I always like
Speaker 8: to ask this as a fundamental question, what is the
Speaker 8: best way people can save money when someone else is
Speaker 8: doing their taxes for them, whether it's a firm like
Speaker 8: yours or private practitioner. I think if people have the
Speaker 8: ability to pull their stuff together and not just put
Speaker 8: a box of receipts and all of that in front
Speaker 8: of you, is that not true? I assume you're going
Speaker 8: to agree with me on this issue.
Speaker 7: If you don't summarize your own materials, then you're going
Speaker 7: to pay us to do it. So setting out the
Speaker 7: details of your numbers, adding up the totals, describing them,
Speaker 7: then we can just scan through them and make sure
Speaker 7: that they are properly categorized deductible items, and then drop
Speaker 7: them into the appropriate point in the return. In preparing it.
Speaker 8: Now, you of course can help people with relatively simple returns,
Speaker 8: but every year the tax code gets bigger. When you
Speaker 8: started doing the taxes fifty yard years ago, how much
Speaker 8: has that tax code grown in terms of sections, pages,
Speaker 8: whoever you want to describe it. Has it doubled in
Speaker 8: size in the last fifty years.
Speaker 7: I couldn't tell you. I don't keep track of that.
Speaker 7: I have enough trouble keeping up for the changes.
Speaker 8: Well that's the point I mean. It just seems to
Speaker 8: me that there's always more. Congress is always either uh passing,
Speaker 8: you know, carve outs and exceptions. That's why the lobbyists
Speaker 8: works so hard in Washington, d C. So what I
Speaker 8: want to do is give people an opportunity to however
Speaker 8: complicated or simple their questions might be. Mark will take
Speaker 8: your phone calls at six one, seven, two, five, four
Speaker 8: ten thirty six one seven, nine, three, one ten thirty. Again,
Speaker 8: I don't know what percentage of people at this point
Speaker 8: even attempt to do their taxes, But I think that
Speaker 8: anyone who who's earning money is well advised in this
Speaker 8: day and age to work with someone, whether it's an
Speaker 8: accountant in their neighborhood, or as their taxes get more complex,
Speaker 8: deal with a company like yours. What are some of
Speaker 8: the things that are important to know about this year's
Speaker 8: tax season mark that perhaps are different from others. Let's
Speaker 8: start off with a few new wrinkles that people need
Speaker 8: to be concerned about.
Speaker 7: The tax code was modified to expand the child tax credits,
Speaker 7: adds some additional credits or larger credits for home improvements
Speaker 7: that tend to provide energy efficiency. Depending upon the rating
Speaker 7: of the materials put in, you may need a certificate
Speaker 7: from the contractor to prove that it meets the criteria
Speaker 7: that qualifies the improvement for the credits, and for the
Speaker 7: first time in instead of merely being limited to your
Speaker 7: principal residence, it's potentially available on a vacation home. So
Speaker 7: if you installed solar panels or heat pumps, solar power,
Speaker 7: heat waters, waters windows.
Speaker 8: I have a friend of mine who installed a lot
Speaker 8: of windows which will make his home.
Speaker 7: Tighter insulation windows more secure, that is by way of
Speaker 7: air tight or heat heat protective doors, et cetera. But
Speaker 7: the total costs tends to be limited in those categories.
Speaker 7: The greater credits are available for geothermal, for solar and
Speaker 7: that kind of thing, and those are the.
Speaker 8: Kind of things that are much more expensive as well.
Speaker 7: Oh yeah, but then you also have the potential for
Speaker 7: some rebate grants through either the state government or sometimes
Speaker 7: the power companies.
Speaker 8: Now these are these deductions or are there some deductions
Speaker 8: as well as credits? And I want you to explain
Speaker 8: to people the difference between a deduction and a credit.
Speaker 7: Typically, there's no deduction unless you are doing it more
Speaker 7: on a commercial basis to generate power and sell it
Speaker 7: back to the electric companies. It's more in the nature
Speaker 7: of credits. That is, you get to office your taxes
Speaker 7: by some dollar amount that effectively becomes a tax rebate
Speaker 7: to offset the cost of the installation of the improvement
Speaker 7: that is, reducing your reliance on generated electricity and so forth.
Speaker 8: A lot of people still don't quite understand the difference
Speaker 8: between deductions and credits. Credits are dollar for dollar will
Speaker 8: reduce if you have x amount of credits that will
Speaker 8: reduce your tax obligation on a dollar for a dollar basis.
Speaker 8: A deduction is less valuable because you can you can
Speaker 8: offset the amount of money which is subject to taxation.
Speaker 8: But a deduction is not nearly as valuable, you know.
Speaker 7: As a DAN. The top tax bracket for individuals is
Speaker 7: thirty seven percent. If you have a ten thousand dollars deduction,
Speaker 7: that saves you thirty seven hundred dollars exactly if you
Speaker 7: have a ten thousand credit to saves your ten thousand
Speaker 7: in taxes. That's the basic difference between the deduction and
Speaker 7: a credit.
Speaker 8: Explain very simply, as you often are able, as you
Speaker 8: always seem to be able to do. My guest is
Speaker 8: Mark Misselback. He's a CPA. Mark has been doing this
Speaker 8: for a few years, actually a few years over fifty,
Speaker 8: but he is always at the top of his game.
Speaker 8: He's been a guest in this program now probably for
Speaker 8: fifteen years. Whatever questions you might have about your taxes,
Speaker 8: I will remind all of you that it is tax Day.
Speaker 8: This year is April fifteenth. There's no Patriots Day or
Speaker 8: Marathon Day exception.
Speaker 10: This year.
Speaker 8: It's Tuesday, April fifteenth. I have plenty of questions, but
Speaker 8: the questions that are the most important are the ones
Speaker 8: that work with you. So feel free to join the conversation.
Speaker 8: We'll open up the phone line six one seven, two five,
Speaker 8: four ten thirty. That's pretty easy. Six one seven, two
Speaker 8: five four ten thirty or six one seven nine, three, one,
Speaker 8: ten thirty. Don't be shy. Don't assume someone else is
Speaker 8: going to ask you a question, because taxes are so individualized.
Speaker 8: Back on Night Side with Mark Misselbeck. Get the phones
Speaker 8: going back right after this, and we will start with
Speaker 8: what we take questions in order. So if you wait
Speaker 8: and you call late, you might not make it. If
Speaker 8: you call now, I guarantee you'll get on. Coming back
Speaker 8: on night Side.
Speaker 3: Now back to Dan Ray live from the Window World
Speaker 3: nights Side Studios on WBZ News Radio.
Speaker 8: Six one, seven, two, five, four, ten thirty. Those lines
Speaker 8: are full. The only line that is open is six
Speaker 8: one seven nine. As always, Mark, there'll be plenty of questions. Uh,
Speaker 8: And we're going to start it off with Heather in Arlington. Heather, welcome.
Speaker 8: You're on Night Side with CPA of several years, Mark Misselbeck.
Speaker 8: Go ahead, Heather, what's your comment or question? Hi?
Speaker 11: Thank you very much for taking my call. I wanted
Speaker 11: to ask if you have a child who is over
Speaker 11: eighteen and becomes disabled then that you're providing and they're
Speaker 11: you know, seemed disabled, do you get a tax credit?
Speaker 11: Can you like count that as a dependent? Again, if
Speaker 11: you're providing housing and all that.
Speaker 10: Kind of stuff.
Speaker 7: There's some kind of noise coming through on them on
Speaker 7: the line. But yes, I.
Speaker 12: Heard that as well, Heather everything, okay, yes, No, sorry,
Speaker 12: I don't I didn't hear anything.
Speaker 8: Okay, Yeah, we're hearing some crackling, so that's fine. Okay,
Speaker 8: I heard the same thing.
Speaker 7: Mark, Go ahead, Mark, Yeah, I'm getting a lot of that,
Speaker 7: but I'll try and answer. If they're over eighteen and disabled,
Speaker 7: or over eighteen and a full time student up to
Speaker 7: age twenty four. On the student side, you can still
Speaker 7: claim them as dependent. There's no additional dependency exemption to
Speaker 7: be claimed at this point, with the prospect that at
Speaker 7: the end of the year, if Congress doesn't act, we
Speaker 7: revert to the law as it stood before twenty eighteen,
Speaker 7: and then there would be a dependency exemption and your
Speaker 7: standard deduction would go down. We're waiting now to see
Speaker 7: what action the Congress may take with respect to those
Speaker 7: tax cuts and benefits that were enacted in twenty seventeen
Speaker 7: effective twenty eighteen.
Speaker 8: So in twenty seventeen, Heather's situation was eliminated, and it
Speaker 8: was not that your son or daughter was eighteen at
Speaker 8: that time, but that was something that was taken away
Speaker 8: in twenty seventeen.
Speaker 7: Well, here, here's the deal. The additional trick with this
Speaker 7: is if the child is not your dependent and you're
Speaker 7: paying for the living expenses, college, rooming, car insurance, clothing vacations,
Speaker 7: those are all gifts to the child, and you can't
Speaker 7: give more than eighteen thousand without having to file a
Speaker 7: gift tax return and report the excess as a taxable gift.
Speaker 7: It doesn't result in actual tax paid because you have
Speaker 7: a lifetime exemption approaching fourteen million dollars under the inflation
Speaker 7: adjusted exemption, but you eat into that with each year
Speaker 7: that you gift over eighteen thousand as a full time
Speaker 7: as a full dependent of yours counted as disabled or
Speaker 7: a full time student. All of the expense, since you're
Speaker 7: paying to support the child, are support obligations and not gifts,
Speaker 7: so there's no other tax impact in paying those expenses.
Speaker 8: It's an interesting sort of distinction that Congress makes on
Speaker 8: something like that. Mark. I mean, I understand you can
Speaker 8: have a rationale for almost anything, but boy, that that
Speaker 8: seems to me that in this day and age, I mean,
Speaker 8: if I'm not mistaken, you can you can keep your
Speaker 8: children on your your medical insurance up until the twenty
Speaker 8: six Yeah, And it just seems to me to be
Speaker 8: distinctions that Congress draws, And I don't see why someone
Speaker 8: like Heather who has a child, Oh no.
Speaker 7: I remember I said, full time student from nineteen to twenty.
Speaker 11: No, he's able to go to school now.
Speaker 7: Yeah, a stabled child is in a different category. And
Speaker 7: as it is a full disability, the age limit on
Speaker 7: claiming them as a dependent is gone.
Speaker 8: Right, which seems to me counterintuitive, and again count Congress
Speaker 8: often is counterintuitive. But it seems to me that if
Speaker 8: someone is dealing with the responsibility for a child over
Speaker 8: the age of eighteen, and that child still is able
Speaker 8: to maintain independence and live at home, we should be
Speaker 8: giving that family encouragement, you know, financially and otherwise to
Speaker 8: be able to continue care for the child. I think Heather,
Speaker 8: you understand what I'm what I mean, and I'm sure
Speaker 8: I want as well. I just wish Congress would understand it,
Speaker 8: is what I'm trying to say, because it seems to
Speaker 8: me to be frankly unfair in my opinion.
Speaker 7: Well, you could explore the possibility of claiming it a
Speaker 7: child dependent care credit. I don't delve into that as
Speaker 7: much as I may have or may need to be
Speaker 7: able to fully advise you, but you could take a
Speaker 7: look at that.
Speaker 8: Okay, do you have a quick question for me? Do
Speaker 8: you have your taxes prepared? Do you do them? I
Speaker 8: hope you don't do them yourselves because they're so.
Speaker 11: Damned Oh, absolutely not. We were going to ask our
Speaker 11: tax professional. But I my husband and I were talking
Speaker 11: about the other night. We're like, what happens if you
Speaker 11: ever a kid who was okay and then becomes disabled,
Speaker 11: and then now you're responsible again? Can you claim them?
Speaker 10: You know?
Speaker 8: Yeah? But I just think that again, the Congress produces
Speaker 8: these these new regulations or they changes, they change the code,
Speaker 8: and on one like this, the average American if you said,
Speaker 8: should someone who's taking care of a child over the
Speaker 8: age of eighteen, should they receive some additional tax benefit?
Speaker 8: I mean as opposed to saying, well, we're gonna put
Speaker 8: them in some sort of a medical facility or some
Speaker 8: sort of a facility that's going to care for him.
Speaker 8: It's much more economic for that the other taxpayers and
Speaker 8: for the government for you to be caring for your child,
Speaker 8: and and your child probably is much more comfortable in
Speaker 8: a home, in an at home setting. Why would Congress
Speaker 8: not recognize that? That's That's one of the frustrations I
Speaker 8: have as somebody who deals with Congress a lot a
Speaker 8: lot of times, and you just know that there has
Speaker 8: to be someone out there who's working some some committee
Speaker 8: or some members or influential member of Congress, uh and
Speaker 8: and and not looking at it from the perspective of
Speaker 8: Heather from Arlington, who's dealing with the situation of of
Speaker 8: of you know, difficulty, but also you know, love for
Speaker 8: her child. So Heather, thank you for doing what you do.
Speaker 8: And I hope that that your son or daughter is
Speaker 8: going to be uh taken care of and and hopefully
Speaker 8: will regain their independence totally in some in some form
Speaker 8: of goal. You bet you, Heather, Thanks for listening tonight.
Speaker 11: Thank you so much, very well.
Speaker 13: Ye bye.
Speaker 8: Thanks Mark. Do you agree with me on that that
Speaker 8: sometimes you wonder what the rationale is for Congress to
Speaker 8: do this or not do this?
Speaker 7: Well as to the student age limit, the seeming logic
Speaker 7: behind it is four years of undergraduate degree. Two years
Speaker 7: of graduate degree should give somebody enough education to support themselves, right,
Speaker 7: and if you're still supporting them. Then it's more, it's
Speaker 7: not your obligation under the law, and it's not to
Speaker 7: get them to the point where they've gained the skills
Speaker 7: to go to work. It's just gifting to them to
Speaker 7: continue on to whatever life goal they may have before
Speaker 7: they become productive members of society. So that's the twenty
Speaker 7: four age cut off, But disability continuing to support and
Speaker 7: not be treated as a gift that causes further tax
Speaker 7: implications to you and keeps them out of the dole
Speaker 7: of the government supporting them is seemingly the logic behind it,
Speaker 7: as much as I can divine whatever logic there may
Speaker 7: be to this area of the law.
Speaker 8: Right, but it sounds to me as if heather situation
Speaker 8: is that she will not be able to claim him
Speaker 8: as him or her as it dependent up when they
Speaker 8: get beyond the age of eighteen, even though.
Speaker 7: Oh no, no, no no, if they're disabled, the age limit
Speaker 7: has no impact on it. It is the fact that
Speaker 7: the child is disabled or even the adult is disabled,
Speaker 7: and they are still caring for them.
Speaker 8: Okay, good, then, I'm i'm I'm all revised and revoked
Speaker 8: by remarks. I was under the impression that she that
Speaker 8: she was not receiving the benefit of being able to
Speaker 8: claim that child, that disabled young person as a dependent.
Speaker 8: We'll take a quick break. Thanks very much for the clarification. Mark,
Speaker 8: I'm sorry I misunderstood the conversation. That's my fault. We'll
Speaker 8: be back on Nightside. The only line open right now
Speaker 8: is six one, seven, nine, three, one, ten thirty. All
Speaker 8: the other lines are filled up. We will get to
Speaker 8: as many people as we can and Mark Misselbeck uh
Speaker 8: is with us until ten o'clock at least, if your
Speaker 8: interest continues. Mark has always been very generous with his time.
Speaker 8: We will be back on Nightside right after this with
Speaker 8: Mark Misslbeck CPA of fifty three years, so he knows
Speaker 8: what he's talking about. Coming back on Nightside.
Speaker 3: You're on night Side with Dan Ray on WBZ, Boston's
Speaker 3: news radio.
Speaker 8: All right, back, we go to the phones, and I
Speaker 8: want you to know Mark, we have full lines, so
Speaker 8: let's keep rolling. Here're gonna go to Suzanne in Newton. Suzanne,
Speaker 8: do you have a tax question from I?
Speaker 13: Actually do. I am an eighty six year old lady
Speaker 13: in assistant living. I have my taxests in New York,
Speaker 13: but can I deduct anything at this stage? Of my life.
Speaker 13: I can't dedust by rent. I do deduct my charitable contributions.
Speaker 13: This is not a vacation house. Is there anything at
Speaker 13: eighty six yearly in an assistant living with some services
Speaker 13: can deduct legitimately. I don't have any.
Speaker 8: I don't have Okay, you gotta listen up, now, says
Speaker 8: any started trying to answer you a question.
Speaker 7: Go ahead, mark ye. In order to itemize, you have
Speaker 7: to have more than the standard deduction that is provided
Speaker 7: in the law, depending upon your filing status. Assuming you
Speaker 7: are a single person for twenty twenty four, the standard
Speaker 7: deduction is fourteen eight hundred dollars, and if you're over
Speaker 7: age sixty five, and that sounds as though you are,
Speaker 7: then there's an additional nineteen hundred and fifty dollars permitted
Speaker 7: as a deduction without having to figure out taxes, charitable
Speaker 7: contributions of medical interests and so forth. So you're starting
Speaker 7: off with sixteen seven hundred and fifty dollars. If your
Speaker 7: aggregate itemized deductions are less than that, it doesn't make
Speaker 7: sense for you to try and itemize for schedule a
Speaker 7: itemized deduction. Now that said, if you have significant charitable contributions,
Speaker 7: or you bunch your charitable contributions, that is, make a
Speaker 7: bundle in one year and not do it the year
Speaker 7: before and the year after. That raises your charitable contributions
Speaker 7: plus up to ten thousand dollars of local taxes automobile
Speaker 7: X size, real estate or income taxes to the state.
Speaker 7: The cap is currently ten thousand dollars. That can go
Speaker 7: into the bucket to beat that sixteen thousand dollars deduction
Speaker 7: plus medical in excess of seven and a half percent
Speaker 7: now in the medical category if you're an assisted living.
Speaker 7: Each year the assisted living, depending upon its statistical analysis
Speaker 7: of how it has spent its money, will tell you
Speaker 7: what portion, if any, of what you're paying for living
Speaker 7: in the facility can be counted as a medical expense deduction.
Speaker 7: Then you test that for the deduction in excess of
Speaker 7: seven and a half percent to add into your other
Speaker 7: deductions to come up over the standard deduction of sixteen
Speaker 7: seven fifty first single.
Speaker 8: A lot of numbers there, Suzanne, and I'm sure.
Speaker 6: That thanks you so much, by.
Speaker 8: Right, okay, age, okay, thanks Susan appreciated. The point is
Speaker 8: that there are things out there and and deductions that
Speaker 8: you might not be aware of, and that's what we're
Speaker 8: hoping to do. So, Uh, the the answer that Mark
Speaker 8: just gave to Suzanne could apply to hundreds or thousands
Speaker 8: of people who were similarly situated. So again, this might
Speaker 8: be a reason why you might say to yourself, I
Speaker 8: want to go to a professional tax preparer, or if
Speaker 8: I'm doing them myself, I at least want to be
Speaker 8: aware of some of the things that Mark just mentioned,
Speaker 8: and that's the benefit of this program. Next up is
Speaker 8: Steve from Rentham. Steve, you're on with Mark Misselbeck the CPA,
Speaker 8: not only for Knight's Side tonight, for my nightside audience,
Speaker 8: but with Cherry Beckett Advisory LLC out of Waltham.
Speaker 14: Go right ahead, Steve, Steve, if you're ready to go,
Speaker 14: ready to go, If you're having a good you're on
Speaker 14: with Mark Misselbeck.
Speaker 8: Go ahead, Steve.
Speaker 6: Hey, Mike, Because of cod whatever and getting older, I
Speaker 6: put a rental property in an irrevocable trust. But then
Speaker 6: the house needed all new windows inside and everything else.
Speaker 6: But the trust didn't have any funds to do that,
Speaker 6: so I supplied the money to do that. There is
Speaker 6: a way to write off the money that I theoretically
Speaker 6: loaned the irrevocable trust.
Speaker 7: Well, either you actually loaned the money to the trust
Speaker 7: and it's not a write off because you expect to
Speaker 7: collect it back, or you made an additional contribution or
Speaker 7: transfer into the trust. Now, if the trust is a
Speaker 7: fully irrevocable trust and a completed gift, you had a
Speaker 7: gift tax return you needed to file when you placed
Speaker 7: the rental property into that trust, and any additional funds
Speaker 7: need to be reported as a gift. The good part
Speaker 7: is if you have the proper provisions in the trust
Speaker 7: that treat any additions as an immediate gift to the
Speaker 7: beneficiaries of the trust. The first eighteen thousand transferred into
Speaker 7: the trust per beneficiary will not impact your gift ability
Speaker 7: for current or through your current gifts or through your estate.
Speaker 7: After that, you reduce your ability to make gifts through
Speaker 7: your estate as bequests. But if you're going to treat
Speaker 7: it as a loan, not only do you not have
Speaker 7: any deduction because you're going to get the money back,
Speaker 7: you need to charge interest. If the loan is in
Speaker 7: excess of ten thousand dollars and remains outstanding for more
Speaker 7: than six months and there are governor governments, there are
Speaker 7: governments set minimum interest rates that must be applied to
Speaker 7: that loan. Otherwise, on December thirty first, whether you collected
Speaker 7: interest or not, or charged interests or not, the government
Speaker 7: now mandates, or the Congress has mandated, that that minimum
Speaker 7: interest rate for the rental of the money by the
Speaker 7: borrower must be paid to you in the form of
Speaker 7: interest and is treated as given back to the borrower,
Speaker 7: in this case as a gift because of the relationship
Speaker 7: between you as the lender and the trust of the borrower.
Speaker 8: Steve, let me ask you this. The house that you
Speaker 8: put in the trust is not your the home in
Speaker 8: which you live. It's a second property, correct, Okay? Is
Speaker 8: that property available? Is that property rented? You get income
Speaker 8: for that property?
Speaker 6: Well, the income comes in to pay the mortgage. And
Speaker 6: I did it as a medicarrier locable trust.
Speaker 8: No, I understand, but that's not my question, and I
Speaker 8: just want to make sure that I understand that. And
Speaker 8: also it may well, I'm sure Mark want to comment,
Speaker 8: how long have you owned this this house that you
Speaker 8: put in trust? This this this this separate property that
Speaker 8: you put in trust. Uh, and that you now have
Speaker 8: invested some money to modernize it or to make it tighter.
Speaker 8: How how how long had you owned the property outright
Speaker 8: before you put it in trust?
Speaker 6: Forty plus years and it's been in the trust now
Speaker 6: four years?
Speaker 8: Okay? During those forty plus years, has it always been
Speaker 8: a rental? Have you treated it as a rental property?
Speaker 8: Has it? Have you been able to rent and make
Speaker 8: money off it during the summers? Or has it just
Speaker 8: sat there and no rent came to you?
Speaker 7: No?
Speaker 6: No, it was always rental.
Speaker 8: Okay. How much money last year would have you made
Speaker 8: in terms of your rental property? How much rent would
Speaker 8: have you would have that generated for you? Approxiate? I
Speaker 8: don't know.
Speaker 6: About eighty thousand, okay?
Speaker 8: And how much was the how much was the money
Speaker 8: that you invested the loan you made to do whatever
Speaker 8: you wanted to do?
Speaker 6: One hundred and twenty.
Speaker 8: Okay, So there's some numbers, mister missiback. He's generating about
Speaker 8: eighty per year and it's spent one hundred and twenty
Speaker 8: in one year. How would you handle that?
Speaker 7: The one twenty sounds like it's a loan. You need
Speaker 7: to charge interest the highest short term rate on the
Speaker 7: demand loan that the government mandates as a minimum industrate
Speaker 7: in twenty twenty four I believe was five point one
Speaker 7: two percent in June of twenty twenty four. So if
Speaker 7: you charge interest to the trust at five point one
Speaker 7: two percent, which seems to be below what you would
Speaker 7: get if you went to a commercial lender at a bank,
Speaker 7: you'd have a favorable interest rate, you'd have to pick
Speaker 7: up the interest. The trust would have to pay you
Speaker 7: that interest. Now, without getting into it, somebody needs to
Speaker 7: look at the terms of the trust or speak to
Speaker 7: the attorney who crafted the trust to make sure that
Speaker 7: it is a completed gift, that the trust is responsible
Speaker 7: for paying taxes and not you. Depending upon the terms
Speaker 7: of the trust, it could be that you were responsible
Speaker 7: for reporting the income rather than the trust. I can't
Speaker 7: speak to that without going through the trust document, which
Speaker 7: of course I can't do tonight.
Speaker 8: Yeah, but okay, at least I think he's given you
Speaker 8: some guidance here. The most important thing is, I assume
Speaker 8: you have a profession who prepared your taxes. If you
Speaker 8: have an income property that's going to generate eighty thousand
Speaker 8: dollars per year, correct, and.
Speaker 6: The trust is under I report it as income on
Speaker 6: my tax return.
Speaker 8: Okay, well, I think the answers are going to be
Speaker 8: pretty obvious when you sit with you. But again, you've
Speaker 8: got to treat it as an arms length transaction and
Speaker 8: you have to be concerned about, uh, the what I
Speaker 8: think Mark would be referring to as imputed interest. So
Speaker 8: I hope we've helped you a little bit. It's uh,
Speaker 8: it's a good There's probably a lot of people out
Speaker 8: there who are in similar situations. So thank you for
Speaker 8: joining us.
Speaker 6: Tonight, YOD, thank you, You're very welcome.
Speaker 8: We'll take a break. My guest is Mark Missilbeck. We'll
Speaker 8: be right back. We have a couple of only one
Speaker 8: open line six one seven, two five, four ten thirty.
Speaker 8: Jump on board. We have coming up next. We got
Speaker 8: Maria in Plymouth. We got Jimmy and Cambridge and Jay
Speaker 8: and Sharon and I got some room for you, but
Speaker 8: only at six one seven, five, four ten thirty. Back
Speaker 8: on night Side right after this.
Speaker 3: Now back to Dan ray Line from the Window World,
Speaker 3: Light Side Studios on w b Z the news radio.
Speaker 8: My guess, Mark Misselbeck, CPA. We're talking taxes. Tax Day
Speaker 8: approaches April fifteenth, as it does every year. Let me
Speaker 8: go next to Maria in Plymothy. Maria, you are next
Speaker 8: on Night Side with Mark Missilback. Welcome, Go right ahead, Maria.
Speaker 8: What is your question for Mark?
Speaker 10: Hi? Mark? My question is on the regarding the circuit breaker,
Speaker 10: say credit whatever for the circuit breaker to qualify, do
Speaker 10: you have to pay Massachusetts income tax?
Speaker 7: It's more well, the circuit breaker is a credit back,
Speaker 7: so if you don't have tax, you may not get
Speaker 7: benefit from it. But there are income limits. You need
Speaker 7: to give them all kinds of details of your taxes
Speaker 7: and other elements. And from what I hear amongst the
Speaker 7: community of CPA preparers, virtually every submission of the circuit
Speaker 7: breaker tax is scrutinized very strongly by the Department and
Speaker 7: a revenue and they demand all kinds of information and
Speaker 7: documentation for it. I hate to be discouraging on it,
Speaker 7: but very few of anybody who has submitted it gets
Speaker 7: clear sailing on it, to my.
Speaker 10: Knowledge really, because we have some people at our Senior
Speaker 10: center filling out forms and they said, you know, people
Speaker 10: have done well getting their money back. But I just wondered,
Speaker 10: because my income comes from a mass pension, so you
Speaker 10: don't pay tax on that in Massachusetts.
Speaker 13: So I wondered if you have.
Speaker 10: No taxable Massachusetts income, if there would still be a
Speaker 10: possibility of getting a credit. I didn't know if the
Speaker 10: credit comes from like your town, through the taxes, or
Speaker 10: it comes through this.
Speaker 7: No, it's coming from the state. It's part of your
Speaker 7: submission of your state income tax return. I've only done
Speaker 7: it a couple of times. The couple of times I
Speaker 7: did it, the income was so low that it did
Speaker 7: not seem to draw the attention of the department in
Speaker 7: challenging it. But I have had communications posted on our
Speaker 7: professional message board that it is problematic in a lot
Speaker 7: of instances. It may be that people who are edging
Speaker 7: towards or slightly over or slightly under the ceiling on
Speaker 7: the income limit to qualify for this benefit draw more
Speaker 7: scrutiny than the others. But I could just that is
Speaker 7: the word amongst.
Speaker 8: Us, If I could just jump in for a second
Speaker 8: for those who do not know what a circuit what
Speaker 8: the circuit breaker is that Marie is referring to senior
Speaker 8: citizens sixty five years of age or older by December
Speaker 8: thirty first of last year might be eligible to claim
Speaker 8: a refundable credit on a Massachusetts personal income tact return.
Speaker 8: The circuit Breaker tax credit is based on the actual
Speaker 8: real estate taxes or rent paid on the Massachusetts residential
Speaker 8: property you own or rent and occupy as your principal residence.
Speaker 8: The maximum credit amount for your tax year of twenty
Speaker 8: twenty four is two seven hundred and thirty dollars. If
Speaker 8: the credit you owed exceeds the amount of the total
Speaker 8: tax payable for the year, you'll be refunded the additional
Speaker 8: amount of the credit without interest. So I just want
Speaker 8: people to understand what we're talking about here. This is
Speaker 8: a tax break for senior citizens who are sixty five
Speaker 8: years of age or overlay.
Speaker 12: DAN.
Speaker 7: This is where this is where the practicing community is
Speaker 7: sharing information and saying as a pure outgo from the
Speaker 7: state Treasury. In a lot of instances, it's another area
Speaker 7: that is perceived to be susceptible to fraud, as was
Speaker 7: the earned ERC credits and other credits that the FED
Speaker 7: adopt the federal government adopted during COVID nineteen that was
Speaker 7: rife with fraud. So it while it sounds beneficial, it
Speaker 7: also tends to attack attract greater scrutiny because of the
Speaker 7: potential for the fraud.
Speaker 8: All right, Maria, thank you very much for the question.
Speaker 8: That's that's an area of a very very interesting area.
Speaker 8: Thanks very much.
Speaker 10: Good, have a great I asked one more quick question.
Speaker 8: Yeah, go ahead, go ahead.
Speaker 10: Okay, quick question. So if my husband passed away last
Speaker 10: year in the spring, I would file is still filed jointly?
Speaker 6: Yes?
Speaker 7: For the year that the spouse dies. Yes, you file
Speaker 7: mary filing jointly thereafter your single unless you have a
Speaker 7: qualifying child and can claim head of household. I don't
Speaker 7: imagine that's the case here, but I put it out there.
Speaker 8: Okay, thanks Maria, Okay, thank you so much. Have a
Speaker 8: great night. Let me go to Jimmy and Cambridge. Jimmy,
Speaker 8: how are you, sir?
Speaker 12: I'm good, Dan, nice to talk to you again. Thank
Speaker 12: you so much for your show tonight.
Speaker 8: I know who this is. If you want to identify
Speaker 8: yourself further, great, If you don't, that's okay too, my friend.
Speaker 8: You go right ahead.
Speaker 12: Sure.
Speaker 13: Well.
Speaker 12: First of all, I love the show. I don't know
Speaker 12: that much about taxes, so I'm glad you have an
Speaker 12: expert on But I was reading recently that Doge and
Speaker 12: the Trump administration is planning on cutting more IRS agents
Speaker 12: during tax season, and the articles I was reading was
Speaker 12: saying this is going to result in less tax revenue
Speaker 12: for the United States of America. So I asked, your guest,
Speaker 12: do you think cutting IRS agents and the demonization of
Speaker 12: the IRS that seems to go on in certain sectors
Speaker 12: of our society, do you think that's healthy for the economy?
Speaker 12: Do you think it's healthy for the United States of America.
Speaker 8: Okay, let me first of all give Mark an opportunity.
Speaker 8: He's here as a CPA are for tax advice. I
Speaker 8: don't know if he wants to weigh it into what
Speaker 8: might be construed as a political question. Jim, so Mark,
Speaker 8: you can you can either defer or you can react.
Speaker 7: I will remain neutral in the broadcast community and say
Speaker 7: that this is more of a political nature than falling
Speaker 7: into the area of advice on taxes. This is more
Speaker 7: on tax collection, tax enforcement, and sometimes tax advice, because
Speaker 7: a chunk of those people will be manning the IRSH
Speaker 7: communication centers where the questions come in during tax season
Speaker 7: to the best of their ability, they will also answer
Speaker 7: questions such as I'm doing tonight.
Speaker 8: Yeah, absolutely right. I think that I think Jim is a.
Speaker 12: Good question of that.
Speaker 8: Dan and I also think this and to comment that
Speaker 8: some people might read into that answer. If I could,
Speaker 8: if I could make an editorial coal Man, thanks Jimmy.
Speaker 8: That gentlemen is a well known Greater Boston comedian, Jim Tingle. Jimmy,
Speaker 8: thanks very much. We'll talk soon.
Speaker 12: Okay, Thanks, Dan, appreciate it.
Speaker 8: You bet you. We'll be right back now. We're going
Speaker 8: to take a break. Mark, I got some other calls.
Speaker 8: If you could stay with us for a little while
Speaker 8: into the next hour, we'll see if the calls sustain. Uh.
Speaker 8: Can you I know it's a Friday night, and I
Speaker 8: know it's the end of a long week. Can I
Speaker 8: hold you over into the next hour?
Speaker 7: My week runs through the weekend at this time of
Speaker 7: the year.
Speaker 8: Uh. He is a good sport and a great friend, Mark, Misslbeck. Uh,
Speaker 8: he's a fabulous CPA to boot. If you have a
Speaker 8: question and you're on the line, we're going to get you,
Speaker 8: I promise. If you're not the only lines that are
Speaker 8: open right now, we're six one seven, two, five four
Speaker 8: ten thirty six one seven, two, five, four ten thirty
Speaker 8: back with Mark, Misslbeck. Mark, we get about six or
Speaker 8: seven minutes here. If you need to stretch your legs
Speaker 8: or get a glass of water. That's a exactly what
Speaker 8: I'm going to do. We'll be back in about six
Speaker 8: or seven minutes with CPA Mark Misselbeck of the firm
Speaker 8: Cherry Beckhart Advisory LLC out of Waltham, Massachusetts. They do
Speaker 8: not need more business. If you want to contact Mark,
Speaker 8: you can do that. But he does this and I
Speaker 8: think he enjoys doing and he enjoys talking to nightside listeners,
Speaker 8: and I am very grateful for his time. We'll be
Speaker 8: back on nightside right after this