March 7, 2025 • 41 mins
Do you have your tax filing information in order? Do you have a specific question about a tax deduction or the necessary paperwork you need to complete your tax filing? Dan spoke with CPA Mark Misselbeck with Cherry Bekaert Advisory LLC, and he answered all your tax-related questions for a second hour!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
It's night Side with Dan Ray. I'm delay Boston News Radio.
Speaker 2 (00:07):
All right, our number two coming up with Mark Misslbeck.
Mark Missilbeck a CPA of more than a few years.
He has been also more than a few years the
unofficial night Side Tax CPA. Mark works with a big
firm called Cherry Beckard Advisory LLC eight hundred South Street
(00:29):
in Waltham. And Mark, I know you do this off
the top of your head, and it amazes me that
no matter what someone asks you, you were able to
give them an answer. I mean, I I never practiced
tax law. I've done tax returns for people, never at
the level of complexity that you deal with. It has
(00:53):
to be, you know, a real struggle to keep up
with Congress. I mean the two thousand and seventeen Tax Act.
One of the things that bothered me about that. And
I'll just get a little political for a moment. I
don't expect you to chime in here is that in
many states like Massachusetts and New York and California, Maryland
(01:17):
that are New Jersey, Connecticut, that are Democratic controlled states,
there's pretty high real estate taxes and high income tax,
income state taxes, and the so called salt limitations of
ten thousand dollars on the taxes was the device that
(01:40):
the Trump administration very effectively used because in a lot
of the red states, they're not dealing with real estate
taxes like we deal here in Massachusetts or state income taxes.
Speaker 3 (01:55):
It was pretty pretty clever.
Speaker 2 (01:58):
Of what happened in twenties seven a team. But I
believe that there is some talk in Congress now to
remove that cap, or at least increase that cap so
that not this year, but beginning next year, if they
do pass a new tax act, that people in Massachusetts
who pay significantly more real estate taxes, more state income taxes,
(02:22):
and in other states like you know, Maryland, New York,
New Jersey, California, will get a little bit of relief.
Do you see what I see that there was a
little bit of politics in the twenty seventeen Tax Reform Act.
Speaker 4 (02:39):
Possibly, but I think it's more noise than reality. What
do you think the tax top tax rate is? And
what do you think the savings is from deducting those taxes?
Speaker 3 (02:56):
It depends upon how much real estate taxes should pay.
Speaker 4 (03:00):
If you're someone you know, I mean, what what percentages
the savings?
Speaker 2 (03:06):
Thirty seven percent. In other words, if you used to
pay For example, I live in Newton, and you can
pay forty fifty thousand dollars easily on real estate taxes.
Speaker 4 (03:15):
Yeah, but Dan, Dan, In a lot of instances, the
savings is only nine percent.
Speaker 2 (03:20):
Why would it be nine percent because there's.
Speaker 4 (03:23):
A little hidden agenda called the Alternative minimum Tax or
AMT AMT.
Speaker 3 (03:30):
Yep, that's that's a good point.
Speaker 4 (03:31):
What you deduct on regular tax in your regular taxes
at thirty seven percent for taxes, those taxes are not
deductible for AMT, and the tax rate under AMT is
twenty eight percent. So if you have a higher tax
under AMT, you pay the AMT in it to bring
your regular tax up to the AMT. So if you
(03:55):
save at thirty seven but you pay back at twenty eight,
the net savings may only be nineteen percent. Well it
may sound better than it is as a deduction.
Speaker 2 (04:06):
Oh, absolutely, because and of course the AFT is another
device that the government uses to go after. You know,
we're always told it's the rich people that don't pay taxes,
but you know, people pay a lot of taxes.
Speaker 4 (04:19):
Do you know what the origin of the AMT was?
Speaker 3 (04:22):
No, the political origin.
Speaker 4 (04:24):
No, the sound and thunder in nineteen sixty nine of
a congressional hearing where it was brought out that eleven
millionaires paid no tax whatsoever, brought in the then alternative
minimum tax, and in nineteen eighty six it was transmogrified
(04:45):
with the writing over of all the tax law in
that broad based change to our modern AMT.
Speaker 2 (04:55):
Right was that was the Rostenkowski was the chairman of
in the Ways and Means Committee.
Speaker 4 (05:03):
And got a deal with the with the Reagan administration.
Speaker 2 (05:05):
Yes, he did kind of deal with the Reagan administration
and some of the problems there where there were people
that were had invested in legitimate, legitimate real estate investments
and a lot of the deductions and credits which have
been promised to people from making legitimate investments.
Speaker 4 (05:22):
In really but highly leveraged in some really really aggressive.
Speaker 2 (05:28):
Well there was something outright fraud. But because there there
was there was fraud there.
Speaker 4 (05:37):
Dan proud or not, I went. I went through the
middle with those packed shelters and the ratio was four
times the deductions of what you invested. The dirty little
secret was at the time getting five or six percent
immuni bonds if you had the discipline to put the
tax savings from that leverage deduction aside and invest that
(06:00):
with that five or six percent rate to build up
the money to repay the taxes when you got out
of the darn things. You had to be into them
for twenty five years to break even.
Speaker 3 (06:12):
Right.
Speaker 2 (06:12):
But my recollection, and again you probably because if you
were practicing tax law you have a better recollection, is that.
For example, specifically on historic preservation properties, which were absolutely
legitimate deductions, those deductions and credits were dramatically reduced after
people invested in those and relied upon the tax code
(06:36):
as it existed in nineteen eighty three or nineteen eighty four,
and the ground rules then got changed retroactively. And I
think that was an abomination, and I think a lot
of people came to that conclusion ultimately as well. The
other there were other items which were actually fraudulent, I mean,
and there should have been people and probably were some
(06:58):
that went to jail, But on legitimate historic preservation properties,
I think those are very legitimate investments that people made.
Speaker 4 (07:07):
They got their credits, they if they didn't use them
in the years they got into them, and they slopped
over into the post eighty six Tax Act changes he
asked they could be limited and have taken a while
to get. They were pushed off and deferred, but still
ultimately available either on realization of income of the same
(07:30):
sort of category or on the disposition of the project
that generated the income or law the credits and losses.
Speaker 2 (07:41):
And again I remember that very well, and I think
I think the Reagan administration actually came to regret the
eighty six Tax Act. And of course Ruskin Ruskyinkowski, im
if I'm not mistaken, was eventually indicted. He was the
Chairman of Ways and Means at that time. If you
(08:01):
recall the guy, so the guy that was writing tax
code in America as the chairman of the Housewives and
Meets Committee ended himself ended up himself being indicted.
Speaker 4 (08:11):
If you I think we're going a little far afield
from our listeners at this point.
Speaker 2 (08:15):
No, no, I understand that that's fine, that's fair enough.
But I do want to keep up. Let's get back
to phone calls. I'm going to go to Jay and share,
and Jay, I appreciate you. You're hanging in here with us.
Speaker 5 (08:25):
Go right ahead, Jay, Yeah, Hi, thanks for taking account.
Speaker 2 (08:30):
So I'm sorry about that that little side side uh
side step go right ahead, you're.
Speaker 5 (08:36):
With thank you. So my question is I'm thinking of
buying an innocent property in New Hampshire. And my question was,
it's a brand new property coming up. So if I'm
like to buy that, I know that is a depreciation
that I can account for or doing the taxes for
this year. But if I'm furnishing and you know, completely
(08:58):
furnishing the unit and all that, but what other expenses
can I include? Are there any allowances for those expenses?
Speaker 4 (09:08):
Dam I'm going to ask you to summarize because a
lot of that didn't come through clearly.
Speaker 2 (09:12):
Okay, this gentleman is buying a investment property in New Hampshire.
Is this an investment property that you'll be renting out?
This is not going to be the second time that
you're going to rent out, okay. And I think your
question was, in addition to the property, which you could
depreciate over time, you wanted to know if you were
(09:34):
to refurnish the property. I assume this might be a
new property that you're purchasing, are you able to also
to depreciate the furniture as well as the purchase price
of the property.
Speaker 4 (09:44):
Yes, the furniture would be a seven year write off.
There are mandatory tables the IRS has issued and as
long as you don't backload your purchases where forty percent
of what you put in service falls into the last
quarter of the ye, those tables are good for the
entire year. For whatever you put in service, a certain
(10:06):
percentage would be deductible in the year placed in service,
and then the percentages go out for the following years.
On the building itself. If it's sufficiently large purchase, you
might consider what is known as a cost segregation study,
where an engineering firm would evaluate not only the building
(10:29):
but the components to the building, and certain components would
be classified not as the building but as personal property
appurtenances that would have a shorter life. For example, your
furniture is seven years. If the building is residential, you
would have to write it off over twenty seven and
a half years. If it's commercial that is more than
(10:52):
twenty percent rented to commercial operations out of the total
square footage. It's not twenty seven and a half years,
thirty nine years as a write off, okay, so moving
it down. And one thing other that some people ignore
land is land and is always there at the end
(11:12):
of the day. You have to carve out of your
purchase price the portion of the price that is attributable
to the land that compell or high water at the
end of the day is still there, So no depreciation
on that.
Speaker 5 (11:26):
Okay, okay, thank you. And one other questions if I
may ask, great, Yeah, so in terms of tactics for
last year, you know, are you still taking you know,
new new folks. If I wanted to get my taxes
done now, I've been doing it all these years, but
I thought maybe it's time I get some professional advice
and help. So just checking, right, are you still able
(11:53):
to take people to file tax returns?
Speaker 4 (11:58):
We're not taking on clients at your level, I don't believe.
I don't think it would be cost effective, but you
certainly should be able to find someone who will work
on your taxes. It may be, however, in searching for
someone at this point in time, that they would have
to put you on extension and do your taxes after
(12:20):
April fifteenth. Yeah, they they might feel more obligated to
the people who've been with them for a while.
Speaker 2 (12:29):
The other thing, Jay, is that the extension pretty much
is granted, but you do have to, as Mark has
emphasized every time we talk about extensions, you have to
basically pay.
Speaker 4 (12:41):
Yeah, you make your best effort to figure out what
it is you expect to owe and whatever you haven't
already paid, and you need to send in with the extension.
Speaker 5 (12:52):
Yep.
Speaker 2 (12:53):
And the other thing to consider, Jay, is that it's
always nice to have a tax prepared that is close
to home. Uh So, if you know Mark's Marx company,
which you certainly can call if you want, There's not
nothing would prevent you from calling Cherry Burkert Advisory in Waltham.
It's always helpful if you can find someone closer to
(13:14):
home so that you're you know, it's a little bit
more convenient in terms of running back and forth.
Speaker 3 (13:19):
So that would be my advisory on that as well.
Speaker 5 (13:21):
Okay, okay, thank you, thank you so much.
Speaker 3 (13:25):
Jay, very welcome, thanks for calling Nightside. We'll take a
very quick break.
Speaker 2 (13:28):
I guess Mark Misselbeck he is our he's providing tax
advice for Nightside listeners. I am indebted to him greatly,
and if you want to, we will continue till eleven
o'clock and if you if you have a question, just dial.
I have one line at six one seven two five
thirty and one at six one seven nine three one
(13:49):
ten thirty. This is a free tax advice that is
worth much more than what you don't pay for it.
Normally they say free advice is what's worth what you
pay for it. Well, this is free tax advice that
actually is worth a lot to you and to other.
Speaker 3 (14:04):
Listeners as well.
Speaker 2 (14:05):
And I appreciate Mark taking his time twice a year
as he does for Nightside. Back on Nightside with more
calls and questions for Mark Missilebeck right after this.
Speaker 1 (14:16):
Now back to Dan Ray live from the Window World
Nightside Studios on WBZ News Radio.
Speaker 3 (14:23):
Back to the phones we go.
Speaker 2 (14:24):
Let's go to Gene Gene, welcome you and next on Nightside.
Your question uh for for my guest CPA Mark Missilebeck.
Speaker 3 (14:32):
He awaits your question.
Speaker 6 (14:33):
Yes, Hi, Hi Jan, thank you very much. Hi Mak
So here's my question. Okay, my horrible lutgage company that
really has is just incredibly lacking. They they had this
(14:55):
is this is a minor thing, but I need to
find out what to do with it. They you know,
took too much escrow and now they sent me ten
ninety nine for twenty two dollars of interest, so A
tenety nine a m C. So we took the Schedule
(15:18):
B form to put that extra interest on. And yeah,
I couldn't find anywhere else that it goes, Am I
right on that that I should put it on the
Schedule B.
Speaker 4 (15:35):
Yes, they they earned twenty two dollars for holding your
money to be able to pay insurance and taxes, and
they put it into that fund for future use in
paying insurance and taxes. And if you reach a point
where your equity in the house at fair value versus
(15:58):
the mortgage out stand rises to fifty percent or more,
you may be able to ask them to discontinue the
escrow element and let you pay your insurance and taxes
on your own because you have such a great amount
of equity into the property.
Speaker 6 (16:17):
Yeah, I like to get rid of them really quick.
The horrible and they really have messed me up a lot,
the horrible. I don't know how they keep license, to
be honest, but there is no consumer protection around anymore.
Speaker 4 (16:33):
You should talk to a credit assistance agency and potentially
look at a refi into a different mortgage.
Speaker 6 (16:43):
Yeah, I know, thank you, Gene.
Speaker 3 (16:47):
How much equity. Do you have in your property A lot?
Speaker 4 (16:51):
A lot.
Speaker 3 (16:53):
I don't want you to.
Speaker 4 (16:54):
You check with one of your local credit unions. They
usually have a fairly good rate, particular if you're a patron.
Positive very much.
Speaker 6 (17:04):
I appreciate it. I do wish we had more consumer
protection out there. That there's really not too many places
to call for help anymore. So I did put that
money in here on this on this Schedule B. I
do not have capital gains and all that, so I
know I could skip some of that portion of that form,
(17:24):
but on I also added it onto line thirty.
Speaker 4 (17:29):
Six at it goes from the Schedule B onto another
line on the face of the return. The one thing
you want to do on Schedule B. However, there are
a couple of questions about foreign bank accounts and trusts.
Ye don't have them. You do want to? You do
want to? You do want to put an answer in there.
Speaker 6 (17:47):
Of no, okay, thank you. I just wanted to make
sure I'm kind of doing this right, and I did
put it online thirty six of the Schedule B.
Speaker 4 (17:59):
Also, yeah, I don't have the forms in front of me,
and I can't tell you the specific lines, but you
you do enter the item in there, you total it
on the bottom. It's on one half of the form.
You take a total for that half of the form,
and then you bring it over on to the front
of the return. The page one of the page one.
Speaker 6 (18:21):
Of the I edited, Yeah, I edited in there along
with my regular interest. I added the twenty two dollars
in there.
Speaker 4 (18:31):
All the all of the different interests items should be
on the schedule.
Speaker 6 (18:34):
B though yes, yes it is, but in the Massachusetts
form they have Massachusetts bank interest.
Speaker 4 (18:43):
And so yeah, well, the new for this year, they
don't give you the hundred or two hundred dollars exclusion
any longer. That was revealed last year. I noticed one
different The one difference is the one difference is mass
bank interest will not be capable of being offset if
(19:04):
you have capital losses. Non mass bank interest and dividends.
If you have capital losses, can apply against those, but
not against the mass bank interest. That's the one difference
that remains in having mass bank interest.
Speaker 6 (19:19):
Okay, thank you very much. I appreciate you, Jeane.
Speaker 3 (19:22):
Best of luck.
Speaker 5 (19:23):
You're gonna be okay.
Speaker 3 (19:24):
Don't worry. They're not gonna off you for twenty two bucks.
Speaker 6 (19:27):
Thank you. Thank you very much.
Speaker 4 (19:29):
I know, thanks very much.
Speaker 2 (19:33):
There are a lot of honest people out there, and
Gene is someone who's very honest. She's being so careful
and so diligent and and my hat's off to folks
like that. We will take a quick break Mark Misselbeck.
We've still got calls here, so we're going.
Speaker 3 (19:45):
To keep rolling. Six one.
Speaker 2 (19:47):
The only line that is open right now, folks, is
the six one, seven nine. You get in there now,
we'll be able to get to you. But if you wait,
we will be running out of time because Mark will
not be here, uh any longer than this hour. So
if you have a question, now is the time to
dial six one seven, And the number to dial is
(20:08):
six one seven, nine, three one, ten thirty. The other line,
they're all filled up. We're coming back on night Side.
Speaker 1 (20:16):
It's night Side with Boston's News Radio.
Speaker 2 (20:23):
We are talking with Mark Misselbeck, CPA and taking your
questions on taxes. Let's go next to Anna from Marlborough, Massachusetts. Anna,
welcome you next time night Side with Mark, Misslbeck. What's
your question for Mark? Go right ahead. Anna.
Speaker 7 (20:36):
Hello, So I feel a little embarrassed because I feel
like I should know a little more about taxes at
this point.
Speaker 8 (20:42):
But oh, well, you know something.
Speaker 2 (20:45):
The only I learned a long time ago, Anna, The
only dumb question is the question that you're too afraid
to ask. There are really no questions.
Speaker 8 (20:53):
If you don't here, I am take it.
Speaker 3 (20:55):
That's okay, You're gonna get fine, Go right ahead.
Speaker 7 (20:59):
Okay. So, my long term partner and I have two
young children, and we own a home together. I'm a nurse,
but I'm currently working part time as I work through
a master's program. My partner is a full time engineer,
and so I am wondering who should claim the children,
who should claim the house? And would marriage significantly alter
(21:24):
our tax situation?
Speaker 3 (21:28):
Those are great questions.
Speaker 4 (21:29):
Go ahead, Mark, great, great and complex. Yes, if you
had the children together. If you've had the children together,
it becomes a question of who has supplied the greater
portion of the support, essentially the family first question, who
(21:51):
owns the house? One of you alone or both of.
Speaker 7 (21:54):
You together, both of us together?
Speaker 9 (21:59):
All right.
Speaker 4 (22:00):
The obligation then is for each of you to underwrite
half of the cost of the house, So it should
be half each of the taxes, the insurance, and so forth.
If there's a mortgage, you each get half of the interest,
you each get half of the taxes, and if you
have enough, you itemized deductions. The threshold for itemization on
(22:24):
a single return is less than on a joint return.
The only way to work it out is to test
what would happen if you were filing married, But the
person supplying the part of the support for the children
should be the one who claims the children. It sounds
as though the engineer who brings some of the larger
(22:45):
paycheck would be the greater tax savings vehicle of claiming
the children, and legitimately may do so if their wage
base is that much more than yours in contributing to
the support of the entire family.
Speaker 7 (23:02):
M yep, Okay, But that that does sound right, at
least for the time being. Yep.
Speaker 4 (23:10):
On the facts before me. That's that's the best answer
I can give it the moment.
Speaker 5 (23:14):
Okay.
Speaker 7 (23:15):
And in marriage, how does marriage significant? Would marriage significantly
alter that? You may have answered that I'm.
Speaker 4 (23:22):
The tax brackets. The tax brackets are wider before they
hit the next level, But then you have the combined income.
But if yours is significantly less than the other partner
in the group, it may be that the combined tax
rate is less than the separate tax rates as singles.
Speaker 7 (23:45):
Okay, I understand, I get that.
Speaker 4 (23:49):
The itemized that the itemized deductions that neither you get.
There may be better off under the joint rules than
under the single rules. As I say, you have to
synthesize what hypothetical marital filing would look like, and you
have to, in fact be married by the end of
the year to file as married filing joint unless you're
(24:12):
in a state where common law marriages recognized, and you
can make the case that you have the indices or
indisia of a common law marriage.
Speaker 7 (24:24):
Is that Massachusetts? Do they recognize common law marriage?
Speaker 4 (24:27):
That's a coalegal question, out of tax question, so I
can't answer it.
Speaker 2 (24:34):
Okay, and neither I'm not going to give any legal advice.
I'll try to google it for you. At some point,
things do change. And how long have you and your
partner been together? You have two children? How old are
the children?
Speaker 7 (24:47):
Our children are three and almost one. We've been together
for about nine years.
Speaker 2 (24:52):
Okay, Well, you may be at least thinking about getting married.
Speaker 7 (24:55):
I assume this, Oh we are, Yeah, No, it's honestly,
at this point, and it's like kind of a strategic
type of thing, you know, like when's the right time
to do it. And so that's why I was really
wondering if it would impact our taxes. I know that
it would impact my ability to get to the loan.
Speaker 4 (25:13):
Yeah, it typically does impact your taxes. It may be
more favorable in your case than in other cases. If
both of you were earning the same amount of money
or in the higher earning capacity. It might be adverse
to get married in terms of immediate income taxes, but
in terms of estate taxes, it would be more beneficial
(25:34):
in a marital unit than in an unrelated cohabitation, which
is essentially what you have now. Yeah, there is unlimited
gifting and unlimited bequests of property between spouses, but there
is a cap on transfers between unrelated parties, and if
you're not married, you're deemed unrelated for these purposes.
Speaker 7 (25:57):
Oh my gosh, I didn't I didn't know they're the
cap on transfers.
Speaker 4 (26:04):
Each person may give any other person of their choice
eighteen thousand dollars a year. If the aggregate of what
is given to another party exceeds eighteen thousand dollars, it
eats into the lifetime giving that may be done currently
about thirteen fourteen million dollars, but if the changes that
(26:26):
were in effect effectuated with the twenty seventeen taxak collapse
at the end of the year, that will go down
to about five million. It may not currently be a problem,
but as you age and your property appreciates and you
accumulate more assets, it may become a problem.
Speaker 2 (26:47):
Okay, also may be a good problem to have your
if your assets have accumulated that amount.
Speaker 3 (26:53):
I have an answer for you.
Speaker 2 (26:54):
On common law marriage, Massachusetts does not recognize the creation
of common law mans marriages within the state. However, it
does recognize common law marriages that were legally established in
other states. This means if a couple you and your partner.
This means that if a couple was considered common law
(27:16):
married in another state, they will have the same rights
in Massachusetts as any other married couple. Which leads to
the question, during your nine years together, have you ever
lived in any other state?
Speaker 5 (27:29):
We haven't.
Speaker 7 (27:30):
Now, Mas Jesus has been at.
Speaker 2 (27:34):
Massachusetts, which you think of as being a very progressive
state on this issue, is not progressive because one it
will impact tax revenue and two, it would probably offend
the dominant religion in Massachusetts, Roman Catholicism, which does encourage
people to get married. So you have a legal analysis
(27:57):
and also be tax analysis.
Speaker 3 (27:59):
Two for one night, you have a special.
Speaker 7 (28:01):
Okay, perfect, Thank you so much. That was really helpful.
Speaker 2 (28:05):
You sound like a great person. And I'm sure you
guys are in a good relationship.
Speaker 3 (28:09):
And it won't Yeah, it'd be too bad.
Speaker 2 (28:11):
Yeah, I mean you can, you know, do it, get it,
get it over with. And I thank you.
Speaker 3 (28:16):
Yeah, you've been with them long enough. It's probably gonna work.
Speaker 9 (28:20):
You know.
Speaker 10 (28:21):
I think you're right.
Speaker 7 (28:22):
I think we've been through the tough times. Let me
tell you so with the children, So I think you're okay,
you got.
Speaker 3 (28:29):
That for sure. Thanks Anne, appreciate you going.
Speaker 8 (28:32):
Thank you, thanks for listening.
Speaker 3 (28:34):
Tonight's good night. Uh. It's it's amazing the the.
Speaker 2 (28:39):
The breath of questions that people have and get a
little bit of a little a little bit of research
even quickly you find out something. So Mark, we're going
to continue, We're going to take a quick break. I
don't want to short change the next caller.
Speaker 5 (28:56):
Dave.
Speaker 2 (28:57):
We'll join us next. He's our next caller, and we
got open lines after that, folks, So if you if
you'd like to join us. If not, we're going to
let Mark go a little early after the after the
break six one seven, two five four, ten thirty, we
have lines there, and we have one line at six
one seven nine three one ten thirty back with Mark Misselbeck,
(29:17):
who is a CPA UH and has done this stuff
for a long time and has been very successful at it,
and he also.
Speaker 3 (29:26):
Is very good on radio.
Speaker 2 (29:28):
He explains complex issues very clearly and cleanly, which is
what I appreciate, and I learn a lot every night
when I sit here listening to him, and I hope
if you have any question you can join us. We're
coming right back on night Side.
Speaker 1 (29:44):
Now back to Dan Way live from the Window World
night Sight Studios on WBZ News Radio.
Speaker 2 (29:51):
Mark, I won't be able to let you go early.
We have four callers awaiting us here, so let's get
right to it. All of a sudden. People love to
get their questions in at the last minute. Let me
go first to Dave.
Speaker 3 (30:01):
Dave.
Speaker 2 (30:01):
I'm not sure where you're from, but you're on line five.
Speaker 9 (30:04):
Go right ahead, Dave, Hey, Dan, who are you?
Speaker 2 (30:09):
I'm doing just great you'rere with Mark Misselback and we
have three callers behind you.
Speaker 9 (30:13):
So okay, I'll get right to your question. This is question.
Speaker 3 (30:20):
Okay, what where's Dave? Dave? Dave? We just lost year.
There were about fifteen seconds. Where are you from?
Speaker 11 (30:29):
Walfare, Mass? I had the gas station of brighton our
Chester Hill lab. I serviced your cob many years.
Speaker 3 (30:35):
Okay, okay, now I know who you are. Go right ahead,
you got mars.
Speaker 9 (30:39):
I go ahead, right right.
Speaker 11 (30:40):
I just wanted to say hi to you, Dan. I'll
make it quick. I'm still going strong. I'm maybe two
years old now. I listened to your show every now
and then when I can, when I'm out on the road.
But it's good to hear your voice, sir.
Speaker 2 (30:53):
Right back at you, Dave. Thank you for calling in
and for your service. And uh believe me, you can
get this new vice at home. It's called a radio.
I have one in several rooms. You not only can
listen in the car, but you could listen on your
cell phone on the the iHeart app love, love to
have you more often, David.
Speaker 11 (31:11):
You do all the time when I can. And I've
been married almost sixty years. God blood again, keep up
more too.
Speaker 3 (31:19):
Your wife's saint Dave. You know that. Okay, you only
get it, only getting thanks d.
Speaker 9 (31:24):
Wife in the worlds for everything. You take care of it.
Speaker 3 (31:28):
Good night, Okay, let's keep rolling. He gonna go to Nope,
there was no question there for you, Mark, Sorry, but
John has a question.
Speaker 2 (31:36):
John is in debt him? Hey, John walking on with
Mark Misselbeck right ahead.
Speaker 9 (31:41):
Oh, thank you. I'm not sure this is a tax
question or a financial plenty question of two years ago
my mother went in the nursing home. We had to
take all the aspects out of Berne put in my
father's name, so we have some stars. My father passed
away and he had some stars, like three years ago,
and something else in my family was supposed to take
of all the stock work, but that my mother passed
(32:02):
away last year, and we still have a stock in
my father's name, even though I've already done his last
tax return two or three years ago. My question is
I assume we should expect a ten ninety nine for
is a stock dividends? Is that correct?
Speaker 4 (32:23):
Somebody going to get a ten ninety nine for any
dividends paid on that stock, and you may have to
reopen your father's estate to probate that stock asset and
get it out. You're going to have to talk to
a state attorney about what has to be done to
clear the ownership registration on that stock.
Speaker 9 (32:43):
Okay, So I'm sure the ten ninety nine will still
come in his name because we just had a dividend
in his name. So, as you said, pottating a state attorney.
Speaker 2 (32:56):
Yeah, so may have mark. What about an amended return here?
If there was some income. I forget how many years
everybody was still alive, but if the dad was alive
and there was income that wasn't reported in prior years,
that maybe an amended return as well.
Speaker 4 (33:12):
I assume, Well, who and who was supposed to inherit
the stock from your dad? Was it your mom?
Speaker 9 (33:19):
I think it was originally supposed to go to my mother,
but through the estate plan because she was incapacitated. She
had dementia. She was in a nursing for like five
six years before she passed away, so she was a
capacitated at the time I did his last return for
the year twenty twenty two, she did not have enough income,
but her the tax planer we had, they retired the dolphins.
(33:43):
They said because she'd have enough income, she wouldn't need
a tax return. But again, at that time attack the
stock was in my father's name still, so she wouldn't
have gotten a ten ninety nine. He was getting the
ten eighty nine. So the DAN said, maybe.
Speaker 4 (34:00):
How much of a dividend are we talking about?
Speaker 9 (34:04):
Uh, that's not much at all. It's probably like twenty
seven dollars a quarter.
Speaker 4 (34:11):
Fifty four, one hundred and eight dollars, which is just
over the complex trust exemption of one hundred dollars. Complex trust,
the trustee has the discretion to distribute income or accumulate it.
If is a simple trust that would mandate that the
(34:33):
income be distributed, it would have a three hundred dollars exemption,
would not or a tax. But whoever, the person who
was supposed to get the income from the trust is
would have to report the dividend. Okay, then it should
have gone your mother's return. And if she didn't have
enough income, including that one hundred and eight dollars to
(34:54):
have to file a return, you may be able to
argue that there was no return due from anybody.
Speaker 9 (35:01):
Okay. That makes sense, Okay, And then we have to
figure out how to distribute it.
Speaker 4 (35:05):
Because to go, and that's where you still wind up
back in the lap of the state attorney.
Speaker 9 (35:11):
Yeah, right, for the actual how much is that?
Speaker 3 (35:13):
How much is the stock worth today?
Speaker 9 (35:17):
Maybe it's somewhere between eight and ten thousand.
Speaker 2 (35:20):
You would take enough money enough to do it and
and that should be a fairly simple process so that
the estate attorney won't eat it all up. Okay, so
good luck for that, right, Thank you, Thanks John, Talk
to you soon. Let's keep rolling here. We're going to
get two in going to go to Sean in Hull
and we got room for Dan and Halifax. Sean, if
(35:40):
you could be quick for me, I know Dan in
Halifax ahead, Sean, Yeah, I'll be real quick.
Speaker 10 (35:47):
My father passed last year and he set up a
trust for my one sister, and I'm the executor of
the state. So when I filed taxes, you know, and
I haven't no member of the trust. Would I file
that tax return in Massachusetts. The trust was established in Pennsylvania.
Speaker 4 (36:10):
But did your father die as a resident of mass.
Speaker 10 (36:15):
No, he died a resident of Pennsylvania.
Speaker 4 (36:19):
Then you would have a Pennsylvania.
Speaker 10 (36:21):
Filing, So I would file that in Pennsylvania.
Speaker 8 (36:27):
I would do that.
Speaker 4 (36:30):
Further question is, are you're the executive of the estate.
Are you the trustee of the trust?
Speaker 8 (36:35):
Yes?
Speaker 4 (36:36):
I am okay? And is the trust includable in your
father's estate or was it structured to be outside of
his estate.
Speaker 10 (36:47):
Within his estate.
Speaker 4 (36:50):
If it's in his estate, the assets would be stepped
up in his date of death. If the total assets
he owned federally are under thirteen point nine million dollars
as I recall for twenty twenty four, then he has
no federal tax. I can't speak to what may be
an estate tax obligation for Pennsylvania. You'd have to check
(37:14):
with someone more knowledgeable or are locally knowledgeable of Pennsylvania
requirements as to whether or not there were be a
Pennsylvania state tax filing. Then you have a trust return
for the income coming into the trust. And now it
depends upon the terms of the trust that the trust
directs you to pay out all income to the income
(37:37):
beneficiary at least annually or quarterly. Then all the income
would pass out to your sister. If it gives you
discretion and you choose not to pay out all the income,
the trust would be obligated to pay tax on the
income that it is holding on to and the rates
on the Trust peak out at thirty seven percent at
(38:00):
fourteen dollars of income, So frequently is better taxwise. A
lesser tax results for distributions paid out to individuals who
have a much wider tax bracket before they get to
thirty seven percent than in the trust, where the tax
hits the thirty hits the thirty seven percent level and
(38:21):
a much smaller amount of income.
Speaker 3 (38:25):
Did your dad have a lawyer?
Speaker 10 (38:27):
Like everything is complicated?
Speaker 2 (38:29):
Yees, Sean, Did your dad have a lawyer in Pennsylvania?
Speaker 9 (38:34):
Yes, you did.
Speaker 2 (38:35):
That's who you got to start with. Okay, okay, right,
thanks Seank. You you're welcome. Okay, we're gonna get Dan
and Halifax and Dan, we're gonna get you under the
wire real quickly.
Speaker 3 (38:47):
You got about a minute. Go right ahead. You're on
with Mark Misselbeck.
Speaker 8 (38:50):
Okay, I'll make it quick. I just have a question.
So I started a new job a few years ago
and I filled out when I filled out the new
W four, it was the new one and I checked off.
You know, spouse is working. We've been married for almost
ten years. She's still filing, She's still being taxed single.
(39:13):
She has not updated it even after we got married.
And so my question is is there a significant change
in terms of tax and filing if she were to
update her W four to be taxed as married, or
is it more advantageous to leave her alone, you know,
(39:33):
being being taxed, We've being taxed single, we married, we
file married jointly. But in terms of her h paid
payroll deductions, is there any advantage to moving her over
to being taxed married, you know, with spouse working.
Speaker 4 (39:52):
I go back to an old adage of advice, an
old sorrow advice I was given. You'll never be wrong,
you never suit. If you say it depends in taxes,
it depends do you owe money with your tax filing
on the withholdings that are being done or are you
at break even or in refund status when you file
(40:13):
your taxes with these withholdings. Well, if she changes from
single to married but both working, the likelihood is they
will increase the tax withholding. Single she has a higher
tax withholding, but when both work on a married it
tends to increase the withholdings. You may probably come closer
(40:35):
to your regular your overall tax liability. If she changes
the married but says that both of you are working, gentlemen.
Speaker 2 (40:44):
I hate to do this. Okay, we're gonna leave that
question hanging. We're perilously close to eleven o'clock. Dan, Yeah, yeah,
I wish thank you much.
Speaker 3 (40:55):
Mark.
Speaker 2 (40:56):
I gotta let you, let you thank you. Dan appreciate it. Mark,
thank you, thank you, Thank you for thorough answers. Best
of luck for the balance of the tax season. If
people do want to get in touch with you, you know,
and they feel they'd like to and his Cherry Burkert
Advisory c In Becker excuse me Advisory LLC on South
(41:20):
Street in Waltham seven eight one four five three eighty
seven hundred, Mark, I will talk to you next week
to say thank you, but on behalf of everyone, thank
you so much for your time tonight, two hours.
Speaker 4 (41:31):
You're more than welcome.
Speaker 3 (41:33):
Forever.
Speaker 4 (41:34):
Thanks good night everybody.
Speaker 3 (41:37):
And I cannot say good night.
Speaker 2 (41:39):
I have to tell you here comes to eleven o'clock
News and be back right after the eleven with the
twentieth hour of the week.
It's night Side with Dan Ray. I'm delay Boston News Radio.
Speaker 2 (00:07):
All right, our number two coming up with Mark Misslbeck.
Mark Missilbeck a CPA of more than a few years.
He has been also more than a few years the
unofficial night Side Tax CPA. Mark works with a big
firm called Cherry Beckard Advisory LLC eight hundred South Street
(00:29):
in Waltham. And Mark, I know you do this off
the top of your head, and it amazes me that
no matter what someone asks you, you were able to
give them an answer. I mean, I I never practiced
tax law. I've done tax returns for people, never at
the level of complexity that you deal with. It has
(00:53):
to be, you know, a real struggle to keep up
with Congress. I mean the two thousand and seventeen Tax Act.
One of the things that bothered me about that. And
I'll just get a little political for a moment. I
don't expect you to chime in here is that in
many states like Massachusetts and New York and California, Maryland
(01:17):
that are New Jersey, Connecticut, that are Democratic controlled states,
there's pretty high real estate taxes and high income tax,
income state taxes, and the so called salt limitations of
ten thousand dollars on the taxes was the device that
(01:40):
the Trump administration very effectively used because in a lot
of the red states, they're not dealing with real estate
taxes like we deal here in Massachusetts or state income taxes.
Speaker 3 (01:55):
It was pretty pretty clever.
Speaker 2 (01:58):
Of what happened in twenties seven a team. But I
believe that there is some talk in Congress now to
remove that cap, or at least increase that cap so
that not this year, but beginning next year, if they
do pass a new tax act, that people in Massachusetts
who pay significantly more real estate taxes, more state income taxes,
(02:22):
and in other states like you know, Maryland, New York,
New Jersey, California, will get a little bit of relief.
Do you see what I see that there was a
little bit of politics in the twenty seventeen Tax Reform Act.
Speaker 4 (02:39):
Possibly, but I think it's more noise than reality. What
do you think the tax top tax rate is? And
what do you think the savings is from deducting those taxes?
Speaker 3 (02:56):
It depends upon how much real estate taxes should pay.
Speaker 4 (03:00):
If you're someone you know, I mean, what what percentages
the savings?
Speaker 2 (03:06):
Thirty seven percent. In other words, if you used to
pay For example, I live in Newton, and you can
pay forty fifty thousand dollars easily on real estate taxes.
Speaker 4 (03:15):
Yeah, but Dan, Dan, In a lot of instances, the
savings is only nine percent.
Speaker 2 (03:20):
Why would it be nine percent because there's.
Speaker 4 (03:23):
A little hidden agenda called the Alternative minimum Tax or
AMT AMT.
Speaker 3 (03:30):
Yep, that's that's a good point.
Speaker 4 (03:31):
What you deduct on regular tax in your regular taxes
at thirty seven percent for taxes, those taxes are not
deductible for AMT, and the tax rate under AMT is
twenty eight percent. So if you have a higher tax
under AMT, you pay the AMT in it to bring
your regular tax up to the AMT. So if you
(03:55):
save at thirty seven but you pay back at twenty eight,
the net savings may only be nineteen percent. Well it
may sound better than it is as a deduction.
Speaker 2 (04:06):
Oh, absolutely, because and of course the AFT is another
device that the government uses to go after. You know,
we're always told it's the rich people that don't pay taxes,
but you know, people pay a lot of taxes.
Speaker 4 (04:19):
Do you know what the origin of the AMT was?
Speaker 3 (04:22):
No, the political origin.
Speaker 4 (04:24):
No, the sound and thunder in nineteen sixty nine of
a congressional hearing where it was brought out that eleven
millionaires paid no tax whatsoever, brought in the then alternative
minimum tax, and in nineteen eighty six it was transmogrified
(04:45):
with the writing over of all the tax law in
that broad based change to our modern AMT.
Speaker 2 (04:55):
Right was that was the Rostenkowski was the chairman of
in the Ways and Means Committee.
Speaker 4 (05:03):
And got a deal with the with the Reagan administration.
Speaker 2 (05:05):
Yes, he did kind of deal with the Reagan administration
and some of the problems there where there were people
that were had invested in legitimate, legitimate real estate investments
and a lot of the deductions and credits which have
been promised to people from making legitimate investments.
Speaker 4 (05:22):
In really but highly leveraged in some really really aggressive.
Speaker 2 (05:28):
Well there was something outright fraud. But because there there
was there was fraud there.
Speaker 4 (05:37):
Dan proud or not, I went. I went through the
middle with those packed shelters and the ratio was four
times the deductions of what you invested. The dirty little
secret was at the time getting five or six percent
immuni bonds if you had the discipline to put the
tax savings from that leverage deduction aside and invest that
(06:00):
with that five or six percent rate to build up
the money to repay the taxes when you got out
of the darn things. You had to be into them
for twenty five years to break even.
Speaker 3 (06:12):
Right.
Speaker 2 (06:12):
But my recollection, and again you probably because if you
were practicing tax law you have a better recollection, is that.
For example, specifically on historic preservation properties, which were absolutely
legitimate deductions, those deductions and credits were dramatically reduced after
people invested in those and relied upon the tax code
(06:36):
as it existed in nineteen eighty three or nineteen eighty four,
and the ground rules then got changed retroactively. And I
think that was an abomination, and I think a lot
of people came to that conclusion ultimately as well. The
other there were other items which were actually fraudulent, I mean,
and there should have been people and probably were some
(06:58):
that went to jail, But on legitimate historic preservation properties,
I think those are very legitimate investments that people made.
Speaker 4 (07:07):
They got their credits, they if they didn't use them
in the years they got into them, and they slopped
over into the post eighty six Tax Act changes he
asked they could be limited and have taken a while
to get. They were pushed off and deferred, but still
ultimately available either on realization of income of the same
(07:30):
sort of category or on the disposition of the project
that generated the income or law the credits and losses.
Speaker 2 (07:41):
And again I remember that very well, and I think
I think the Reagan administration actually came to regret the
eighty six Tax Act. And of course Ruskin Ruskyinkowski, im
if I'm not mistaken, was eventually indicted. He was the
Chairman of Ways and Means at that time. If you
(08:01):
recall the guy, so the guy that was writing tax
code in America as the chairman of the Housewives and
Meets Committee ended himself ended up himself being indicted.
Speaker 4 (08:11):
If you I think we're going a little far afield
from our listeners at this point.
Speaker 2 (08:15):
No, no, I understand that that's fine, that's fair enough.
But I do want to keep up. Let's get back
to phone calls. I'm going to go to Jay and share,
and Jay, I appreciate you. You're hanging in here with us.
Speaker 5 (08:25):
Go right ahead, Jay, Yeah, Hi, thanks for taking account.
Speaker 2 (08:30):
So I'm sorry about that that little side side uh
side step go right ahead, you're.
Speaker 5 (08:36):
With thank you. So my question is I'm thinking of
buying an innocent property in New Hampshire. And my question was,
it's a brand new property coming up. So if I'm
like to buy that, I know that is a depreciation
that I can account for or doing the taxes for
this year. But if I'm furnishing and you know, completely
(08:58):
furnishing the unit and all that, but what other expenses
can I include? Are there any allowances for those expenses?
Speaker 4 (09:08):
Dam I'm going to ask you to summarize because a
lot of that didn't come through clearly.
Speaker 2 (09:12):
Okay, this gentleman is buying a investment property in New Hampshire.
Is this an investment property that you'll be renting out?
This is not going to be the second time that
you're going to rent out, okay. And I think your
question was, in addition to the property, which you could
depreciate over time, you wanted to know if you were
(09:34):
to refurnish the property. I assume this might be a
new property that you're purchasing, are you able to also
to depreciate the furniture as well as the purchase price
of the property.
Speaker 4 (09:44):
Yes, the furniture would be a seven year write off.
There are mandatory tables the IRS has issued and as
long as you don't backload your purchases where forty percent
of what you put in service falls into the last
quarter of the ye, those tables are good for the
entire year. For whatever you put in service, a certain
(10:06):
percentage would be deductible in the year placed in service,
and then the percentages go out for the following years.
On the building itself. If it's sufficiently large purchase, you
might consider what is known as a cost segregation study,
where an engineering firm would evaluate not only the building
(10:29):
but the components to the building, and certain components would
be classified not as the building but as personal property
appurtenances that would have a shorter life. For example, your
furniture is seven years. If the building is residential, you
would have to write it off over twenty seven and
a half years. If it's commercial that is more than
(10:52):
twenty percent rented to commercial operations out of the total
square footage. It's not twenty seven and a half years,
thirty nine years as a write off, okay, so moving
it down. And one thing other that some people ignore
land is land and is always there at the end
(11:12):
of the day. You have to carve out of your
purchase price the portion of the price that is attributable
to the land that compell or high water at the
end of the day is still there, So no depreciation
on that.
Speaker 5 (11:26):
Okay, okay, thank you. And one other questions if I
may ask, great, Yeah, so in terms of tactics for
last year, you know, are you still taking you know,
new new folks. If I wanted to get my taxes
done now, I've been doing it all these years, but
I thought maybe it's time I get some professional advice
and help. So just checking, right, are you still able
(11:53):
to take people to file tax returns?
Speaker 4 (11:58):
We're not taking on clients at your level, I don't believe.
I don't think it would be cost effective, but you
certainly should be able to find someone who will work
on your taxes. It may be, however, in searching for
someone at this point in time, that they would have
to put you on extension and do your taxes after
(12:20):
April fifteenth. Yeah, they they might feel more obligated to
the people who've been with them for a while.
Speaker 2 (12:29):
The other thing, Jay, is that the extension pretty much
is granted, but you do have to, as Mark has
emphasized every time we talk about extensions, you have to
basically pay.
Speaker 4 (12:41):
Yeah, you make your best effort to figure out what
it is you expect to owe and whatever you haven't
already paid, and you need to send in with the extension.
Speaker 5 (12:52):
Yep.
Speaker 2 (12:53):
And the other thing to consider, Jay, is that it's
always nice to have a tax prepared that is close
to home. Uh So, if you know Mark's Marx company,
which you certainly can call if you want, There's not
nothing would prevent you from calling Cherry Burkert Advisory in Waltham.
It's always helpful if you can find someone closer to
(13:14):
home so that you're you know, it's a little bit
more convenient in terms of running back and forth.
Speaker 3 (13:19):
So that would be my advisory on that as well.
Speaker 5 (13:21):
Okay, okay, thank you, thank you so much.
Speaker 3 (13:25):
Jay, very welcome, thanks for calling Nightside. We'll take a
very quick break.
Speaker 2 (13:28):
I guess Mark Misselbeck he is our he's providing tax
advice for Nightside listeners. I am indebted to him greatly,
and if you want to, we will continue till eleven
o'clock and if you if you have a question, just dial.
I have one line at six one seven two five
thirty and one at six one seven nine three one
(13:49):
ten thirty. This is a free tax advice that is
worth much more than what you don't pay for it.
Normally they say free advice is what's worth what you
pay for it. Well, this is free tax advice that
actually is worth a lot to you and to other.
Speaker 3 (14:04):
Listeners as well.
Speaker 2 (14:05):
And I appreciate Mark taking his time twice a year
as he does for Nightside. Back on Nightside with more
calls and questions for Mark Missilebeck right after this.
Speaker 1 (14:16):
Now back to Dan Ray live from the Window World
Nightside Studios on WBZ News Radio.
Speaker 3 (14:23):
Back to the phones we go.
Speaker 2 (14:24):
Let's go to Gene Gene, welcome you and next on Nightside.
Your question uh for for my guest CPA Mark Missilebeck.
Speaker 3 (14:32):
He awaits your question.
Speaker 6 (14:33):
Yes, Hi, Hi Jan, thank you very much. Hi Mak
So here's my question. Okay, my horrible lutgage company that
really has is just incredibly lacking. They they had this
(14:55):
is this is a minor thing, but I need to
find out what to do with it. They you know,
took too much escrow and now they sent me ten
ninety nine for twenty two dollars of interest, so A
tenety nine a m C. So we took the Schedule
(15:18):
B form to put that extra interest on. And yeah,
I couldn't find anywhere else that it goes, Am I
right on that that I should put it on the
Schedule B.
Speaker 4 (15:35):
Yes, they they earned twenty two dollars for holding your
money to be able to pay insurance and taxes, and
they put it into that fund for future use in
paying insurance and taxes. And if you reach a point
where your equity in the house at fair value versus
(15:58):
the mortgage out stand rises to fifty percent or more,
you may be able to ask them to discontinue the
escrow element and let you pay your insurance and taxes
on your own because you have such a great amount
of equity into the property.
Speaker 6 (16:17):
Yeah, I like to get rid of them really quick.
The horrible and they really have messed me up a lot,
the horrible. I don't know how they keep license, to
be honest, but there is no consumer protection around anymore.
Speaker 4 (16:33):
You should talk to a credit assistance agency and potentially
look at a refi into a different mortgage.
Speaker 6 (16:43):
Yeah, I know, thank you, Gene.
Speaker 3 (16:47):
How much equity. Do you have in your property A lot?
Speaker 4 (16:51):
A lot.
Speaker 3 (16:53):
I don't want you to.
Speaker 4 (16:54):
You check with one of your local credit unions. They
usually have a fairly good rate, particular if you're a patron.
Positive very much.
Speaker 6 (17:04):
I appreciate it. I do wish we had more consumer
protection out there. That there's really not too many places
to call for help anymore. So I did put that
money in here on this on this Schedule B. I
do not have capital gains and all that, so I
know I could skip some of that portion of that form,
(17:24):
but on I also added it onto line thirty.
Speaker 4 (17:29):
Six at it goes from the Schedule B onto another
line on the face of the return. The one thing
you want to do on Schedule B. However, there are
a couple of questions about foreign bank accounts and trusts.
Ye don't have them. You do want to? You do
want to? You do want to put an answer in there.
Speaker 6 (17:47):
Of no, okay, thank you. I just wanted to make
sure I'm kind of doing this right, and I did
put it online thirty six of the Schedule B.
Speaker 4 (17:59):
Also, yeah, I don't have the forms in front of me,
and I can't tell you the specific lines, but you
you do enter the item in there, you total it
on the bottom. It's on one half of the form.
You take a total for that half of the form,
and then you bring it over on to the front
of the return. The page one of the page one.
Speaker 6 (18:21):
Of the I edited, Yeah, I edited in there along
with my regular interest. I added the twenty two dollars
in there.
Speaker 4 (18:31):
All the all of the different interests items should be
on the schedule.
Speaker 6 (18:34):
B though yes, yes it is, but in the Massachusetts
form they have Massachusetts bank interest.
Speaker 4 (18:43):
And so yeah, well, the new for this year, they
don't give you the hundred or two hundred dollars exclusion
any longer. That was revealed last year. I noticed one
different The one difference is the one difference is mass
bank interest will not be capable of being offset if
(19:04):
you have capital losses. Non mass bank interest and dividends.
If you have capital losses, can apply against those, but
not against the mass bank interest. That's the one difference
that remains in having mass bank interest.
Speaker 6 (19:19):
Okay, thank you very much. I appreciate you, Jeane.
Speaker 3 (19:22):
Best of luck.
Speaker 5 (19:23):
You're gonna be okay.
Speaker 3 (19:24):
Don't worry. They're not gonna off you for twenty two bucks.
Speaker 6 (19:27):
Thank you. Thank you very much.
Speaker 4 (19:29):
I know, thanks very much.
Speaker 2 (19:33):
There are a lot of honest people out there, and
Gene is someone who's very honest. She's being so careful
and so diligent and and my hat's off to folks
like that. We will take a quick break Mark Misselbeck.
We've still got calls here, so we're going.
Speaker 3 (19:45):
To keep rolling. Six one.
Speaker 2 (19:47):
The only line that is open right now, folks, is
the six one, seven nine. You get in there now,
we'll be able to get to you. But if you wait,
we will be running out of time because Mark will
not be here, uh any longer than this hour. So
if you have a question, now is the time to
dial six one seven, And the number to dial is
(20:08):
six one seven, nine, three one, ten thirty. The other line,
they're all filled up. We're coming back on night Side.
Speaker 1 (20:16):
It's night Side with Boston's News Radio.
Speaker 2 (20:23):
We are talking with Mark Misselbeck, CPA and taking your
questions on taxes. Let's go next to Anna from Marlborough, Massachusetts. Anna,
welcome you next time night Side with Mark, Misslbeck. What's
your question for Mark? Go right ahead. Anna.
Speaker 7 (20:36):
Hello, So I feel a little embarrassed because I feel
like I should know a little more about taxes at
this point.
Speaker 8 (20:42):
But oh, well, you know something.
Speaker 2 (20:45):
The only I learned a long time ago, Anna, The
only dumb question is the question that you're too afraid
to ask. There are really no questions.
Speaker 8 (20:53):
If you don't here, I am take it.
Speaker 3 (20:55):
That's okay, You're gonna get fine, Go right ahead.
Speaker 7 (20:59):
Okay. So, my long term partner and I have two
young children, and we own a home together. I'm a nurse,
but I'm currently working part time as I work through
a master's program. My partner is a full time engineer,
and so I am wondering who should claim the children,
who should claim the house? And would marriage significantly alter
(21:24):
our tax situation?
Speaker 3 (21:28):
Those are great questions.
Speaker 4 (21:29):
Go ahead, Mark, great, great and complex. Yes, if you
had the children together. If you've had the children together,
it becomes a question of who has supplied the greater
portion of the support, essentially the family first question, who
(21:51):
owns the house? One of you alone or both of.
Speaker 7 (21:54):
You together, both of us together?
Speaker 9 (21:59):
All right.
Speaker 4 (22:00):
The obligation then is for each of you to underwrite
half of the cost of the house, So it should
be half each of the taxes, the insurance, and so forth.
If there's a mortgage, you each get half of the interest,
you each get half of the taxes, and if you
have enough, you itemized deductions. The threshold for itemization on
(22:24):
a single return is less than on a joint return.
The only way to work it out is to test
what would happen if you were filing married, But the
person supplying the part of the support for the children
should be the one who claims the children. It sounds
as though the engineer who brings some of the larger
(22:45):
paycheck would be the greater tax savings vehicle of claiming
the children, and legitimately may do so if their wage
base is that much more than yours in contributing to
the support of the entire family.
Speaker 7 (23:02):
M yep, Okay, But that that does sound right, at
least for the time being. Yep.
Speaker 4 (23:10):
On the facts before me. That's that's the best answer
I can give it the moment.
Speaker 5 (23:14):
Okay.
Speaker 7 (23:15):
And in marriage, how does marriage significant? Would marriage significantly
alter that? You may have answered that I'm.
Speaker 4 (23:22):
The tax brackets. The tax brackets are wider before they
hit the next level, But then you have the combined income.
But if yours is significantly less than the other partner
in the group, it may be that the combined tax
rate is less than the separate tax rates as singles.
Speaker 7 (23:45):
Okay, I understand, I get that.
Speaker 4 (23:49):
The itemized that the itemized deductions that neither you get.
There may be better off under the joint rules than
under the single rules. As I say, you have to
synthesize what hypothetical marital filing would look like, and you
have to, in fact be married by the end of
the year to file as married filing joint unless you're
(24:12):
in a state where common law marriages recognized, and you
can make the case that you have the indices or
indisia of a common law marriage.
Speaker 7 (24:24):
Is that Massachusetts? Do they recognize common law marriage?
Speaker 4 (24:27):
That's a coalegal question, out of tax question, so I
can't answer it.
Speaker 2 (24:34):
Okay, and neither I'm not going to give any legal advice.
I'll try to google it for you. At some point,
things do change. And how long have you and your
partner been together? You have two children? How old are
the children?
Speaker 7 (24:47):
Our children are three and almost one. We've been together
for about nine years.
Speaker 2 (24:52):
Okay, Well, you may be at least thinking about getting married.
Speaker 7 (24:55):
I assume this, Oh we are, Yeah, No, it's honestly,
at this point, and it's like kind of a strategic
type of thing, you know, like when's the right time
to do it. And so that's why I was really
wondering if it would impact our taxes. I know that
it would impact my ability to get to the loan.
Speaker 4 (25:13):
Yeah, it typically does impact your taxes. It may be
more favorable in your case than in other cases. If
both of you were earning the same amount of money
or in the higher earning capacity. It might be adverse
to get married in terms of immediate income taxes, but
in terms of estate taxes, it would be more beneficial
(25:34):
in a marital unit than in an unrelated cohabitation, which
is essentially what you have now. Yeah, there is unlimited
gifting and unlimited bequests of property between spouses, but there
is a cap on transfers between unrelated parties, and if
you're not married, you're deemed unrelated for these purposes.
Speaker 7 (25:57):
Oh my gosh, I didn't I didn't know they're the
cap on transfers.
Speaker 4 (26:04):
Each person may give any other person of their choice
eighteen thousand dollars a year. If the aggregate of what
is given to another party exceeds eighteen thousand dollars, it
eats into the lifetime giving that may be done currently
about thirteen fourteen million dollars, but if the changes that
(26:26):
were in effect effectuated with the twenty seventeen taxak collapse
at the end of the year, that will go down
to about five million. It may not currently be a problem,
but as you age and your property appreciates and you
accumulate more assets, it may become a problem.
Speaker 2 (26:47):
Okay, also may be a good problem to have your
if your assets have accumulated that amount.
Speaker 3 (26:53):
I have an answer for you.
Speaker 2 (26:54):
On common law marriage, Massachusetts does not recognize the creation
of common law mans marriages within the state. However, it
does recognize common law marriages that were legally established in
other states. This means if a couple you and your partner.
This means that if a couple was considered common law
(27:16):
married in another state, they will have the same rights
in Massachusetts as any other married couple. Which leads to
the question, during your nine years together, have you ever
lived in any other state?
Speaker 5 (27:29):
We haven't.
Speaker 7 (27:30):
Now, Mas Jesus has been at.
Speaker 2 (27:34):
Massachusetts, which you think of as being a very progressive
state on this issue, is not progressive because one it
will impact tax revenue and two, it would probably offend
the dominant religion in Massachusetts, Roman Catholicism, which does encourage
people to get married. So you have a legal analysis
(27:57):
and also be tax analysis.
Speaker 3 (27:59):
Two for one night, you have a special.
Speaker 7 (28:01):
Okay, perfect, Thank you so much. That was really helpful.
Speaker 2 (28:05):
You sound like a great person. And I'm sure you
guys are in a good relationship.
Speaker 3 (28:09):
And it won't Yeah, it'd be too bad.
Speaker 2 (28:11):
Yeah, I mean you can, you know, do it, get it,
get it over with. And I thank you.
Speaker 3 (28:16):
Yeah, you've been with them long enough. It's probably gonna work.
Speaker 9 (28:20):
You know.
Speaker 10 (28:21):
I think you're right.
Speaker 7 (28:22):
I think we've been through the tough times. Let me
tell you so with the children, So I think you're okay,
you got.
Speaker 3 (28:29):
That for sure. Thanks Anne, appreciate you going.
Speaker 8 (28:32):
Thank you, thanks for listening.
Speaker 3 (28:34):
Tonight's good night. Uh. It's it's amazing the the.
Speaker 2 (28:39):
The breath of questions that people have and get a
little bit of a little a little bit of research
even quickly you find out something. So Mark, we're going
to continue, We're going to take a quick break. I
don't want to short change the next caller.
Speaker 5 (28:56):
Dave.
Speaker 2 (28:57):
We'll join us next. He's our next caller, and we
got open lines after that, folks, So if you if
you'd like to join us. If not, we're going to
let Mark go a little early after the after the
break six one seven, two five four, ten thirty, we
have lines there, and we have one line at six
one seven nine three one ten thirty back with Mark Misselbeck,
(29:17):
who is a CPA UH and has done this stuff
for a long time and has been very successful at it,
and he also.
Speaker 3 (29:26):
Is very good on radio.
Speaker 2 (29:28):
He explains complex issues very clearly and cleanly, which is
what I appreciate, and I learn a lot every night
when I sit here listening to him, and I hope
if you have any question you can join us. We're
coming right back on night Side.
Speaker 1 (29:44):
Now back to Dan Way live from the Window World
night Sight Studios on WBZ News Radio.
Speaker 2 (29:51):
Mark, I won't be able to let you go early.
We have four callers awaiting us here, so let's get
right to it. All of a sudden. People love to
get their questions in at the last minute. Let me
go first to Dave.
Speaker 3 (30:01):
Dave.
Speaker 2 (30:01):
I'm not sure where you're from, but you're on line five.
Speaker 9 (30:04):
Go right ahead, Dave, Hey, Dan, who are you?
Speaker 2 (30:09):
I'm doing just great you'rere with Mark Misselback and we
have three callers behind you.
Speaker 9 (30:13):
So okay, I'll get right to your question. This is question.
Speaker 3 (30:20):
Okay, what where's Dave? Dave? Dave? We just lost year.
There were about fifteen seconds. Where are you from?
Speaker 11 (30:29):
Walfare, Mass? I had the gas station of brighton our
Chester Hill lab. I serviced your cob many years.
Speaker 3 (30:35):
Okay, okay, now I know who you are. Go right ahead,
you got mars.
Speaker 9 (30:39):
I go ahead, right right.
Speaker 11 (30:40):
I just wanted to say hi to you, Dan. I'll
make it quick. I'm still going strong. I'm maybe two
years old now. I listened to your show every now
and then when I can, when I'm out on the road.
But it's good to hear your voice, sir.
Speaker 2 (30:53):
Right back at you, Dave. Thank you for calling in
and for your service. And uh believe me, you can
get this new vice at home. It's called a radio.
I have one in several rooms. You not only can
listen in the car, but you could listen on your
cell phone on the the iHeart app love, love to
have you more often, David.
Speaker 11 (31:11):
You do all the time when I can. And I've
been married almost sixty years. God blood again, keep up
more too.
Speaker 3 (31:19):
Your wife's saint Dave. You know that. Okay, you only
get it, only getting thanks d.
Speaker 9 (31:24):
Wife in the worlds for everything. You take care of it.
Speaker 3 (31:28):
Good night, Okay, let's keep rolling. He gonna go to Nope,
there was no question there for you, Mark, Sorry, but
John has a question.
Speaker 2 (31:36):
John is in debt him? Hey, John walking on with
Mark Misselbeck right ahead.
Speaker 9 (31:41):
Oh, thank you. I'm not sure this is a tax
question or a financial plenty question of two years ago
my mother went in the nursing home. We had to
take all the aspects out of Berne put in my
father's name, so we have some stars. My father passed
away and he had some stars, like three years ago,
and something else in my family was supposed to take
of all the stock work, but that my mother passed
(32:02):
away last year, and we still have a stock in
my father's name, even though I've already done his last
tax return two or three years ago. My question is
I assume we should expect a ten ninety nine for
is a stock dividends? Is that correct?
Speaker 4 (32:23):
Somebody going to get a ten ninety nine for any
dividends paid on that stock, and you may have to
reopen your father's estate to probate that stock asset and
get it out. You're going to have to talk to
a state attorney about what has to be done to
clear the ownership registration on that stock.
Speaker 9 (32:43):
Okay, So I'm sure the ten ninety nine will still
come in his name because we just had a dividend
in his name. So, as you said, pottating a state attorney.
Speaker 2 (32:56):
Yeah, so may have mark. What about an amended return here?
If there was some income. I forget how many years
everybody was still alive, but if the dad was alive
and there was income that wasn't reported in prior years,
that maybe an amended return as well.
Speaker 4 (33:12):
I assume, Well, who and who was supposed to inherit
the stock from your dad? Was it your mom?
Speaker 9 (33:19):
I think it was originally supposed to go to my mother,
but through the estate plan because she was incapacitated. She
had dementia. She was in a nursing for like five
six years before she passed away, so she was a
capacitated at the time I did his last return for
the year twenty twenty two, she did not have enough income,
but her the tax planer we had, they retired the dolphins.
(33:43):
They said because she'd have enough income, she wouldn't need
a tax return. But again, at that time attack the
stock was in my father's name still, so she wouldn't
have gotten a ten ninety nine. He was getting the
ten eighty nine. So the DAN said, maybe.
Speaker 4 (34:00):
How much of a dividend are we talking about?
Speaker 9 (34:04):
Uh, that's not much at all. It's probably like twenty
seven dollars a quarter.
Speaker 4 (34:11):
Fifty four, one hundred and eight dollars, which is just
over the complex trust exemption of one hundred dollars. Complex trust,
the trustee has the discretion to distribute income or accumulate it.
If is a simple trust that would mandate that the
(34:33):
income be distributed, it would have a three hundred dollars exemption,
would not or a tax. But whoever, the person who
was supposed to get the income from the trust is
would have to report the dividend. Okay, then it should
have gone your mother's return. And if she didn't have
enough income, including that one hundred and eight dollars to
(34:54):
have to file a return, you may be able to
argue that there was no return due from anybody.
Speaker 9 (35:01):
Okay. That makes sense, Okay, And then we have to
figure out how to distribute it.
Speaker 4 (35:05):
Because to go, and that's where you still wind up
back in the lap of the state attorney.
Speaker 9 (35:11):
Yeah, right, for the actual how much is that?
Speaker 3 (35:13):
How much is the stock worth today?
Speaker 9 (35:17):
Maybe it's somewhere between eight and ten thousand.
Speaker 2 (35:20):
You would take enough money enough to do it and
and that should be a fairly simple process so that
the estate attorney won't eat it all up. Okay, so
good luck for that, right, Thank you, Thanks John, Talk
to you soon. Let's keep rolling here. We're going to
get two in going to go to Sean in Hull
and we got room for Dan and Halifax. Sean, if
(35:40):
you could be quick for me, I know Dan in
Halifax ahead, Sean, Yeah, I'll be real quick.
Speaker 10 (35:47):
My father passed last year and he set up a
trust for my one sister, and I'm the executor of
the state. So when I filed taxes, you know, and
I haven't no member of the trust. Would I file
that tax return in Massachusetts. The trust was established in Pennsylvania.
Speaker 4 (36:10):
But did your father die as a resident of mass.
Speaker 10 (36:15):
No, he died a resident of Pennsylvania.
Speaker 4 (36:19):
Then you would have a Pennsylvania.
Speaker 10 (36:21):
Filing, So I would file that in Pennsylvania.
Speaker 8 (36:27):
I would do that.
Speaker 4 (36:30):
Further question is, are you're the executive of the estate.
Are you the trustee of the trust?
Speaker 8 (36:35):
Yes?
Speaker 4 (36:36):
I am okay? And is the trust includable in your
father's estate or was it structured to be outside of
his estate.
Speaker 10 (36:47):
Within his estate.
Speaker 4 (36:50):
If it's in his estate, the assets would be stepped
up in his date of death. If the total assets
he owned federally are under thirteen point nine million dollars
as I recall for twenty twenty four, then he has
no federal tax. I can't speak to what may be
an estate tax obligation for Pennsylvania. You'd have to check
(37:14):
with someone more knowledgeable or are locally knowledgeable of Pennsylvania
requirements as to whether or not there were be a
Pennsylvania state tax filing. Then you have a trust return
for the income coming into the trust. And now it
depends upon the terms of the trust that the trust
directs you to pay out all income to the income
(37:37):
beneficiary at least annually or quarterly. Then all the income
would pass out to your sister. If it gives you
discretion and you choose not to pay out all the income,
the trust would be obligated to pay tax on the
income that it is holding on to and the rates
on the Trust peak out at thirty seven percent at
(38:00):
fourteen dollars of income, So frequently is better taxwise. A
lesser tax results for distributions paid out to individuals who
have a much wider tax bracket before they get to
thirty seven percent than in the trust, where the tax
hits the thirty hits the thirty seven percent level and
(38:21):
a much smaller amount of income.
Speaker 3 (38:25):
Did your dad have a lawyer?
Speaker 10 (38:27):
Like everything is complicated?
Speaker 2 (38:29):
Yees, Sean, Did your dad have a lawyer in Pennsylvania?
Speaker 9 (38:34):
Yes, you did.
Speaker 2 (38:35):
That's who you got to start with. Okay, okay, right,
thanks Seank. You you're welcome. Okay, we're gonna get Dan
and Halifax and Dan, we're gonna get you under the
wire real quickly.
Speaker 3 (38:47):
You got about a minute. Go right ahead. You're on
with Mark Misselbeck.
Speaker 8 (38:50):
Okay, I'll make it quick. I just have a question.
So I started a new job a few years ago
and I filled out when I filled out the new
W four, it was the new one and I checked off.
You know, spouse is working. We've been married for almost
ten years. She's still filing, She's still being taxed single.
(39:13):
She has not updated it even after we got married.
And so my question is is there a significant change
in terms of tax and filing if she were to
update her W four to be taxed as married, or
is it more advantageous to leave her alone, you know,
(39:33):
being being taxed, We've being taxed single, we married, we
file married jointly. But in terms of her h paid
payroll deductions, is there any advantage to moving her over
to being taxed married, you know, with spouse working.
Speaker 4 (39:52):
I go back to an old adage of advice, an
old sorrow advice I was given. You'll never be wrong,
you never suit. If you say it depends in taxes,
it depends do you owe money with your tax filing
on the withholdings that are being done or are you
at break even or in refund status when you file
(40:13):
your taxes with these withholdings. Well, if she changes from
single to married but both working, the likelihood is they
will increase the tax withholding. Single she has a higher
tax withholding, but when both work on a married it
tends to increase the withholdings. You may probably come closer
(40:35):
to your regular your overall tax liability. If she changes
the married but says that both of you are working, gentlemen.
Speaker 2 (40:44):
I hate to do this. Okay, we're gonna leave that
question hanging. We're perilously close to eleven o'clock. Dan, Yeah, yeah,
I wish thank you much.
Speaker 3 (40:55):
Mark.
Speaker 2 (40:56):
I gotta let you, let you thank you. Dan appreciate it. Mark,
thank you, thank you, Thank you for thorough answers. Best
of luck for the balance of the tax season. If
people do want to get in touch with you, you know,
and they feel they'd like to and his Cherry Burkert
Advisory c In Becker excuse me Advisory LLC on South
(41:20):
Street in Waltham seven eight one four five three eighty
seven hundred, Mark, I will talk to you next week
to say thank you, but on behalf of everyone, thank
you so much for your time tonight, two hours.
Speaker 4 (41:31):
You're more than welcome.
Speaker 3 (41:33):
Forever.
Speaker 4 (41:34):
Thanks good night everybody.
Speaker 3 (41:37):
And I cannot say good night.
Speaker 2 (41:39):
I have to tell you here comes to eleven o'clock
News and be back right after the eleven with the
twentieth hour of the week.
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