Cancelled Debt May be Considered Taxable Income by the IRS

Recieved this Blog from Realtor friend. If you are considering Shortsale, BK, Forclosure know your options  and how it will effect you in the future.


July 2012 Tax Newsletter



With the recent economic downturns experienced by many taxpayers, there is a tax concept that is very important: cancellation of debt. You would think that the cancellation of debt by a credit card company or mortgage company would be a good thing for the taxpayer. And it can be, but it can also be considered taxable income by the IRS. Here is a quick review of various debt cancellation situations.
* Consumer debt
If you have gone through some type of credit "workout" program on consumer debt, it's likely that some of your debt has been cancelled. If that is the case, be prepared to receive IRS Form 1099-C representing the amount of debt cancelled. The IRS considers that amount taxable income to you, and they expect to see it reported on your tax return. The exception is if you file for bankruptcy. With bankruptcy, generally the debt cancelled is not taxable.
Even if you are not legally bankrupt, you might be technically insolvent (where your liabilities exceed your assets). If this is the case, you can exclude your debt cancellation income by reporting your financial condition and filing IRS Form 982 with your tax return.
* Primary home
If your home is "short" sold or foreclosed and the lender receives less than the total amount of the outstanding loan, you can also expect that amount of debt cancellation to be reported to you and the IRS. But special rules allow you to exclude up to $2 million in cancellation income in many circumstances. You will again need to complete IRS Form 982, but the exclusion from taxable income brought about by the debt cancellation on your primary residence is incredibly liberal. So make sure to take advantage of these rules should they apply to you.
* Second home, rental property, investment property, business property
The rules for debt cancellation on second homes, rental property, and investment or business property can be extremely complicated. Generally speaking, the new laws that cover debt cancellation don't apply to these properties, and the IRS considers any debt cancellation income taxable. Nevertheless, given your cost of these properties, your financial condition, and the amount of debt cancelled, it's still possible to have this debt cancellation income taxed at a preferred capital gains rate, or even considered not taxable at all.
Be aware that many of the special debt cancellation provisions are set to expire at the end of 2012.
If you're unsure as to how debt cancellation affects you, contact your tax advisor (or ask us for a referral) to review your situation and determine how much, if any, cancelled debt will be taxable income to you.
Posted by Natalie Neith at 14:44 No comments:  Email ThisBlogThis!Share to TwitterShare to Facebook

Fire Prevention Fee

Property owners within the State Responsibility Area (SRA) will soon be receiving a bill requiring payment up to $150 per habitable structure for state fire prevention services.    In July of 2011, the Governor signed legislation (ABX1 29) requiring affected property owners to pay a fee for state fire prevention services in their area. The fee is applied to all habitable structures within the SRA.  The SRA is the area of the state where the State of California is financially responsible for the prevention and suppression of wildfires.  SRA does not include lands within city boundaries or in federal ownership. To see if your property is within the SRA, use the State Responsibility Area Viewer website: http://www.firepreventionfee.

org/sraviewer.php
The fee is levied at the rate of $150 per habitable structure, which is defined as a building that can be occupied for residential use. Owners of habitable structures who are also within the boundaries of a local fire protection agency will receive a reduction of $35 per habitable structure.
This fee will fund a variety of important fire prevention services within the SRA including brush clearance and activities to improve forest health so the forest can better withstand wildfire.

Note: The transfer of title does not trigger the fee.  The notice of the Fire Prevention Fee has been included in Disclosure Source NHD Reports since September 2011.
For more information about the Fire Prevention Fee visit: 

http://firepreventionfee.org/
sra_faqs.php
and
http://www.homewarranty.com/
pdfs/Fire_Prevention_Fee_Program.pdf

My First Triathalon

  Well I have completed my list of fitness activities I wanted to complete by my 50th birthday. The triathlon was 3 weeks after my 50th because of a knee injury, but I completed it.
On my list was a 5K, 10K, 1/2 marathon (13.1 miles) and a triathlon. 5K ran this with my wife and Jaime (niece) Santa Anita in April, 10K in the Antelope Valley in May, Half Marathon in June in Ventura along the beach time 2 hours 21 mins. The tri which consisted of 500 meter swim, 10 mile bike ride and 3.1 run. time 2hrs.5 secs. I loved the 1/2 marathon, the tri was brutal!!!! The swim which I thought would be a piece of cake. Huh..150 guys swimming all together. Right off the bat I got kicked in the chest and face..Hey no one told me about that, then A guy used me as a starting block, swam over my back and used my head as a push off platform. The run ......The worst run ever, with the temp at 102, hills, I wanted to stop... But I pushed on, My time for the miles was bad. 14 min miles My usual is 10:40 mins.

  My wife who lets me know all the time she is not fifty yet (5 weeks and counting)also did the tri. I am very proud of her. I think she is also proud of herself. She had herself convinced she couldn't do it,but she did..... Hmmm anyone up for a full Marathon?????

Is This a Sign For The Housing Market?

Home prices nationwide have hit a bottom, and home values are finally on the rise.

NEW YORK (CNNMoney) -- Home prices hit a bottom and are finally bouncing back, according to an industry report released Tuesday.
Nationwide, home values rose 0.2% year-over-year to a median $149,300 during the second quarter, the first annual increase since 2007, real estate listing site Zillow reported. Prices were up 2.1% from the first quarter.

Even though June marked the fourth consecutive month of home value increases, overall home prices are still down almost 24% since April 2007, when Zillow began to track home values.
"[I]t seems clear that the country has hit a bottom in home values," said Zillow's chief economist Stan Humphries. "The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own."
Last winter, Zillow projected that the housing market turnaround would not arrive until the end of the year.
Other home price indexes have also recorded gains lately, including the S&P/Case-Shiller home price index. In it latest release, it reported that home prices in 20 major markets rose 1.3% in April, the first monthly increase in seven months.

Where home prices are rising the fastest

Zillow uses a different methodology in calculating home values than other home price indexes like Case-Shiller and the Federal Housing Finance Agency. Sales of foreclosed, bank-owned properties, for example, are not factored into Zillow's data. Zillow does include short sales, however, which are more difficult to distinguish from conventional sales.
"Our index is geared to consumers, conventional sellers deciding whether they want to put their homes on the market," said Humphries.
The indexes that include foreclosures in their market data show larger price declines. The peak-to-trough drop for the S&P/Case-Shiller home price index, for example, is about 34% compared with Zillow's 24%

0:00/2:07Housing: The worst is over ... really!

Fewer than one third of the 167 metro areas Zillow surveyed recorded annual increases in home values, but the size of the price gains in these areas more than offset the losses posted by the remaining two-thirds of the markets.
In Phoenix, the biggest gainer, home values soared 12.1% year-over-year to a median of $136,200. Meanwhile, the biggest loss sustained by any of the 30 largest metro areas was in Chicago where median home values fell 5.8% to $158,600.
Foreclosures remain one of the biggest risks to the housing market recovery, Humphries said. In the wake of the national foreclosure settlement which clarified how banks can legally pursue foreclosures, Humphries expects the pace of foreclosures to pick up.
"That will translate to more homes on the market," he said. "But we think demand will rise to absorb that."
Zillow expects the housing market to continue to slowly recover, with median home values projected to climb 1.1% -- relatively flat -- over the next 12 months.

Most affordable cities for buying a home

Beaten down markets like Phoenix, Las Vegas and many Florida cities, will likely record greater-than-average gains over the next 12 months, said Humphries.
The results in those places, however, will be bumpy. Home price increases will cause some homeowners who have been patiently waiting for values to rebound to put their homes on the market. And those additional listings could cool prices for a while, resulting in a staircase effect with "price spikes followed by plateaus," said Humphries.

How to treat peple.

Found this on Stumble.      Five Lessons About How To Treat People
-- Author Unknown

1. First Important Lesson - "Know The Cleaning Lady"

During my second month of college, our professor gave us a pop quiz. I was a conscientious student and had breezed through the questions, until I read the last one: "What is the first name of the woman who cleans the school?"

Surely this was some kind of joke. I had seen the cleaning woman several times. She was tall, dark-haired and in her 50s, but how would I know her name? I handed in my paper, leaving the last question blank. Just before class ended, one student asked if the last question would count toward our quiz grade.

"Absolutely," said the professor. "In your careers, you will meet many people. All are significant. They deserve your attention and care, even if all you do is smile and say "hello."

I've never forgotten that lesson. I also learned her name was Dorothy.


2. Second Important Lesson - "Pickup In The Rain"

One night, at 11:30 p.m., an older African American woman was standing on the side of an Alabama highway trying to endure a lashing rainstorm. Her car had broken down and she desperately needed a ride. Soaking wet, she decided to flag down the next car.

A young white man stopped to help her, generally unheard of in those conflict-filled 1960s. The man took her to safety, helped her get assistance and put her into a taxicab.

She seemed to be in a big hurry, but wrote down his address and thanked him. Seven days went by and a knock came on the man's door. To his surprise, a giant console color TV was delivered to his home.

A special note was attached. It read: "Thank you so much for assisting me on the highway the other night. The rain drenched not only my clothes, but also my spirits. Then you came along. Because of you, I was able to make it to my dying husband's bedside just before he passed away. God bless you for helping me and unselfishly serving others."

Sincerely, Mrs. Nat King Cole.


3. Third Important Lesson - "Remember Those Who Serve"

In the days when an ice cream sundae cost much less, a 10 year-old boy entered a hotel coffee shop and sat at a table. A waitress put a glass of water in front of him. "How much is an ice cream sundae?" he asked. "50¢," replied the waitress.

The little boy pulled his hand out of his pocket and studied the coins in it.

"Well, how much is a plain dish of ice cream?" he inquired. By now more people were waiting for a table and the waitress was growing impatient. "35¢!" she brusquely replied.

The little boy again counted his coins. "I'll have the plain ice cream," he said. The waitress brought the ice cream, put the bill on the table and walked away. The boy finished the ice cream, paid the cashier and left.

When the waitress came back, she began to cry as she wiped down the table. There, placed neatly beside the empty dish, were two nickels and five pennies. You see, he couldn't have the sundae, because he had to have enough left to leave her a tip.


4. Fourth Important Lesson - "The Obstacles In Our Path"

In ancient times, a King had a boulder placed on a roadway. Then he hid himself and watched to see if anyone would remove the huge rock. Some of the king's wealthiest merchants and courtiers came by and simply walked around it. Many loudly blamed the King for not keeping the roads clear, but none did anything about getting the stone out of the way.

Then a peasant came along carrying a load of vegetables. Upon approaching the boulder, the peasant laid down his burden and tried to move the stone to the side of the road. After much pushing and straining, he finally succeeded. After the peasant picked up his load of vegetables, he noticed a purse lying in the road where the boulder had been. The purse contained many gold coins and a note from the King indicating that the gold was for the person who removed the boulder from the roadway. The peasant learned what many of us never understand - "Every obstacle presents an opportunity to improve our condition."


5. Fifth Important Lesson - "Giving When It Counts"

Many years ago, when I worked as a volunteer at a hospital, I got to know a little girl named Liz who was suffering from a rare and serious disease. Her only chance of recovery appeared to be a blood transfusion from her 5-year-old brother, who had miraculously survived the same disease and had developed the antibodies needed to combat the illness. The doctor explained the situation to her little brother, and asked the little boy if he would be willing to give his blood to his sister. I saw him hesitate for only a moment before taking a deep breath and saying, "Yes, I'll do it if it will save her."

As the transfusion progressed, he lay in bed next to his sister and smiled, as we all did, seeing the color returning to her cheeks. Then his face grew pale and his smile faded. He looked up at the doctor and asked with a trembling voice, "Will I start to die right away?".

Being young, the little boy had misunderstood the doctor; he thought he was going to have to give his sister all of his blood in order to save her.

Preventing running injuries

How Runners Can Prevent Injuries

The 4 Things Runners Need to Do Every Week

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Updated 03/25/12 7:59 PM · Posted 03/14/12 5:08 PMby Jenny Sugar· 3 Comments

Fitness · Running · Injury Prevention · beginner fitness tips

Running is one of the most popular forms of cardio because it's inexpensive, you can do it anywhere, and it burns major calories while toning your lower body. That said, if you run, here are four things you should be doing every week.

1. Vary your workouts: Doing the same running workout all the time can not only be boring, but can also lead to overuse injuries in the muscles. Mix up the surface you run on, change up your pace (don't forget sprinting intervals), incorporate hills, and vary the distance you run. You'll be amazed at how strong your body becomes and how mixing it up makes you a better runner. Also be sure to incorporate other forms of exercise such as cycling, swimming, strength training, and yoga to give your body a break from the same movement.
2. Stretch it out: Don't skip out on stretching after your run (and never static stretch before). It not only feels good, but stretching will also relieve soreness and increase your flexibility — supple muscles are also less prone to pain and injury. Focus on stretches that target the hips, hamstrings, lower back, and shoulders. Follow along with this video to learn a yoga series for runners. You can also use a foam roller to stretch and massage your muscles. Rolling out your IT band can prevent knee, back, or hip issues, and here are five other foam roller exercises for runners.

Keep reading for two more things runners need to do every week.

3. Get strong: Aside from burning calories, an added bonus to running is how well it sculpts your legs and booty. A strong lower body is great, but not if the rest of you is weak. Doing moves that tone your core and arms not only makes you look more evenly toned, but it also prevents muscular imbalances that can lead to pain and injury. Include about three strength-training sessions throughout the week. Here is a strength-training workout you can do at home.
4. Get your rest: It's important to give your muscles a break, so rest days are essential. Depending on whether you're training for a race, include one to three rest days over the course of a week. Rest days can mean doing absolutely no exercise, to doing a light workout like walking or a gentle yoga class, or getting a massage. Here are more ways to take care of your body on a rest day.

Source: Thinkstock

My Cardio Stats for Jan.- March 2012

My Cardio Stats from RunKeeper For the first three months of 2012.

Swimming......... 27.3 Miles   161 hours    115,437 Calories

Cycling..................70.6 miles     9 hours            4,667 Calories

Walking................96.4 miles     25 hours         17,276 Calories

RUNNING..........380 Miles      99 Hours 20 mins.  75,199

Weight: Jan.255lbs. March 245lbs.  -10 lbs.