When a seller inks a deal with a buyer, the buyer expects the utilities and major household appliances to work.
So if the home is sold during the heat of summer, next winter when the thermostat is switched over to heat and nothing comes out of the vent but cold air...
...you can imagine the reaction.
It is the seller's fault. Or the agent's fault. Or somebody's fault.
So the buyer calls his agent who calls the listing agent who tracks the seller down to their new home.
"The heater is broken and the buyer is demanding you replace it," says the agent.
Of course, the heater worked perfectly well last winter, so the seller replies that it will be a cold day in... (well, in the house) before he pays for something that isn't his problem any more.
The listing agent passes that message back to the buyer's agent who passes it back to the buyer and the buyer doesn't believe a word of it.
Obviously, the heater didn't work last year and the seller did not disclose it. The buyer has a brother-in-law who is an attorney and now lawyers are involved.
This actually happens.
Anyone can sue anyone, even when it isn't "fair." Since it costs money to defend against lawsuits, the seller generally gives in and replaces the heater, even when it was in perfect working order last winter. Or the dishwasher, or whatever else has gone wrong.
All of which can be easily avoided through the purchase of a Homeowners Warranty or Home Protection Plan, which is basically
is basically a different kind of insurance.
If the electricity, plumbing, heating, air conditioning, water heater or major appliances break down, the insurance company fixes it.
No muss, no fuss, no lawyers, no wasted time on repetitive phone calls filled with mutual distrust, flaring tempers and bruised egos.
The cost?
For houses under 5000 square feet (which covers most houses) the cost is usually less than $300.
Sellers should price this insurance into their cost expectations when pricing their home. It is not much to pay for peace of mind and the knowledge that when your house is sold, you really will be done with it. Even when the buyer doesn't ask for the warranty, sellers should provide it.
As for buyers, after the first year is up, most warranty plans allow for extensions. In the "olden days," this was considered a waste of money, but things are more expensive now.
The key ingredient in all this is that the seller must warrant that everything is in good working order when the house is sold. So if the buyers insist on a Home Warranty and the seller refuses...
...the buyer is going to wonder, "What's broken?"
http://www.realestateabc.com/insights/warranty.htm
Wednesday, May 30, 2007
Who Can Claim Moving Expenses with the IRS?
Who Can Claim Moving Expenses with the IRS?
Not everyone who moves can deduct moving expenses when they file their income tax returns. Your move has to be work-related, meaning you changed job locations, started a new job, or moved to seek a new job and were successful in obtaining one.
There are exceptions for retirees and survivors who are moving back to the U.S. from oversees.
And there are (of course) conditions.
The IRS calls these conditions “tests.” The “time” test, the “distance" test and the “work-related” test.
The Work Related Test
Say you pick up all your stuff and move. It isn’t actually necessary that you already have a job in the new location. If your moving expenses occurred within one year of the date you first report on the job in the new location, your move is “work-related.”
So… what happens if you delay moving your family and household until 18 months after you start work because you want your son or daughter to finish high school at their old school?
Well, the IRS isn’t entirely heartless. They make exceptions if you have a good reason.
The Distance Test
Your new job location has to be at least 50 miles further from your home than your old job location.
For example, say you used to drive 15 miles to work from your previous home. That means you new job must be at least 65 miles away from where you used to live. Otherwise, you don’t meet the “distance” test.
This doesn’t mean that you have to move 50 miles. All it means is that your new job must be 50 miles further from your former home than your old job.
The Time Test
The time test varies depending on whether you are classified as an employee or whether you are self-employed.
If you are an employee, then after you move to your new area you must work full-time for at least 39 weeks out of the next twelve months. You don’t have to work for the same employer and you don’t have to work 39 weeks in a row, but…
…basically, you have to work 9 out of the next twelve months in your new commuting area.
If you’re away from work temporarily, like a vacation, or sick, or can’t work because your union is on strike or your employer has locked you out…
…that counts as work.
See? The IRS does have a heart!
What if you’re a teacher who normally works only nine months out of the year? If you spend six months working during the school year…that counts. It is a similar situation for other seasonal workers.
If you’re self-employed, the “time test” is essentially the same, but doubled. You have to work 78 weeks out of the next 24 months after the move. You have to work full-time. Being semi-retired and goofing off on the internet for a couple hours a day on one of those late night television “get-rich-quick” schemes doesn’t count.
You really have to work full-time.
Conclusion
You're probably wondering what you can deduct.
Umm...(furtively looking to the left and right)...
We're out of space.
And you really should ask an income tax accountant to handle that one for you.
http://www.realestateabc.com/insights/movingexpenses.htm
Not everyone who moves can deduct moving expenses when they file their income tax returns. Your move has to be work-related, meaning you changed job locations, started a new job, or moved to seek a new job and were successful in obtaining one.
There are exceptions for retirees and survivors who are moving back to the U.S. from oversees.
And there are (of course) conditions.
The IRS calls these conditions “tests.” The “time” test, the “distance" test and the “work-related” test.
The Work Related Test
Say you pick up all your stuff and move. It isn’t actually necessary that you already have a job in the new location. If your moving expenses occurred within one year of the date you first report on the job in the new location, your move is “work-related.”
So… what happens if you delay moving your family and household until 18 months after you start work because you want your son or daughter to finish high school at their old school?
Well, the IRS isn’t entirely heartless. They make exceptions if you have a good reason.
The Distance Test
Your new job location has to be at least 50 miles further from your home than your old job location.
For example, say you used to drive 15 miles to work from your previous home. That means you new job must be at least 65 miles away from where you used to live. Otherwise, you don’t meet the “distance” test.
This doesn’t mean that you have to move 50 miles. All it means is that your new job must be 50 miles further from your former home than your old job.
The Time Test
The time test varies depending on whether you are classified as an employee or whether you are self-employed.
If you are an employee, then after you move to your new area you must work full-time for at least 39 weeks out of the next twelve months. You don’t have to work for the same employer and you don’t have to work 39 weeks in a row, but…
…basically, you have to work 9 out of the next twelve months in your new commuting area.
If you’re away from work temporarily, like a vacation, or sick, or can’t work because your union is on strike or your employer has locked you out…
…that counts as work.
See? The IRS does have a heart!
What if you’re a teacher who normally works only nine months out of the year? If you spend six months working during the school year…that counts. It is a similar situation for other seasonal workers.
If you’re self-employed, the “time test” is essentially the same, but doubled. You have to work 78 weeks out of the next 24 months after the move. You have to work full-time. Being semi-retired and goofing off on the internet for a couple hours a day on one of those late night television “get-rich-quick” schemes doesn’t count.
You really have to work full-time.
Conclusion
You're probably wondering what you can deduct.
Umm...(furtively looking to the left and right)...
We're out of space.
And you really should ask an income tax accountant to handle that one for you.
http://www.realestateabc.com/insights/movingexpenses.htm
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