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Foreclosures and Your Income Tax



Deemed Sale

When you lose your home to foreclosure, or the property is given back to the lender (Deed in lieu of foreclosure), a deemed sale or exchange has taken place under Section §1001(a) of the Internal Revenue Code. This sale or exchange of property could result in a tax gain or loss, and the recognition of cancellation of debt (COD) income to the taxpayer. Cancellation of indebtedness will result in taxable income to the taxpayer unless there is an exception within the statute (IRC Section 108) which is beyond the scope of this article. One important factor that will determine the treatment for tax purposes, is whether your loan is Recourse or Non recourse.

Tax Treatment of Your Foreclosure

When an asset is sold, the difference between the amount realized and the taxpayers “adjusted basis” in the asset will determine the amount of the gain or loss recognized. The Amount realized will either be the fair market value of the property (FMV) or the face value of the debt, depending on whether the debt is classified as recourse or non recourse. Accordingly, if the debt is non recourse, the amount realized is going to be the face value of the debt, creating more gain, but no cancellation of debt income. Conversely, if the debt is recourse, less gain is recognized, because the FMV of the property as of the sale date, is used instead, but there is the possibility of having to recognize COD income. This COD income will be the difference between the Face value of the debt and the FMV of the property.

Know Your State laws Consumer Laws

The tax treatment of your home foreclosure is going to depend on whether your home loan was a Recourse or Non Recourse loan. Some States have laws preventing banks from coming after homeowners on unpaid loan balances, for primary residences, which creates a non recourse situation.

Recourse Loan:

1 – The amount realized is the FMV of the Property.

2 – The adjusted basis is what you paid for the property or acquisition cost, plus capital improvements.

If the property was a rental, then you have to subtract depreciation from the adjusted basis.

3 – Cancellation of debt income is the difference between the fair market value and the face value of the debt.

4 – Gain or loss is the difference between the fair market value and the adjusted basis.

5 – Attribute reduction and/or the elimination of deductible losses due to any forgiven debt income exclusion under IRC Section 108, due to the debt cancellation, must also be calculated, which is outside the scope of this article.

Non Recourse Loan

1 – The amount realized is the face value of the debt.

2 – The adjusted basis is what you paid for the property or the acquisition cost as in (2) above.

3 – Cancellation of debt income is not an issue with recourse debt.

4 – The gain or loss is the difference between the face value of the debt and the adjusted basis.



Car Insurance For Young Driver – A Way To Acquire It



Quite frankly teenage and young adult car drivers are costly to cover. They are usually caught up in more accidents and are less careful on the road than more knowledgeable drivers. However, there are ways to decrease your insurance policy expenditure and get cheapest car insurance for young drivers, keep in mind they may not be straightforward. Many young car owners never imagine what difficulties there is likely to be related to getting insurance cover for their first auto. Dad and mum know that auto insurance for young driver costs a lot, however there may be always a solution to find more cost effective vehicle cover. Among the best methods of obtaining more affordable cover is to shop around, the world wide web is the ideal place to start.

Frequently because of the very high price of car insurance, young drivers now and again do not acquire car insurance, which can prove to be a extremely high priced oversight. It is also true that those inexperienced car owners take out much more pricey policies than they need to. There has to be a equilibrium to finding the cheapest car insurance for young drivers. By carefully setting up their car insurance young drivers can considerably cut their car insurance cover costs. Looking around can collect great benefits as insurance expenditure fluctuate madly from insurer to insurer. Just a few effortless steps could easily reduce premiums and ensure that young car owners have the all necessary cover they need.

One thing I’d say, and this is at the chance of sounding a bit nutty or insane, don’t buy your vehicle and afterward take a look at insurance cover. You’d be clever to take a look at the insurance cover for the type of automobile you want. If you fancy a gasoline guzzling beast, or a sporty, racy vehicle, then you might discover the insurance cover premiums on such autos to be too expensive. You could wish to downsize the type of ‘wheels’ you want, compromise a little. There may be totally no point in getting a brilliant car just to have it sitting within the garage or drive you can’t have out on the open road because of the fact you’ll not be able to afford to cover it, now that’s utter madness. Sure it could seem a bit silly to take a look at insurance when you don’t even have a car thus far, but to get the cheapest car insurance for young drivers you’ll want to have an inkling of what the insurance cover cost is for certain vehicles.

Now you’ve got your car, there are some things you are able to do that can make an insurance company look more favourably on your premiums. Any security gadgets fitted to the auto such as an alarm or an immobiliser will get you an immediate concession on your premium. Better still for those who have a garage you possibly can store your auto in, that’s more likely to give you the greatest concession on your premium. Insurers need to avoid risk and that’s the reason further safety on a car will give you cheaper cover expenses. So finding the cheapest car insurance for young drivers, is attainable, by simply following a few easy measures. Hunt, search and hunt yet again, examine the quotations you get. Keep your auto safe and secure, and hey presto, less costly car cover.

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Car Insurance Rates Going Up – Start Shopping Around Now



Receiving a letter in the mail from your insurance company is seldom a pleasant experience. Those letters often come with some unexpected, and unwanted information, such as a notice that your premiums are going up. If you are the unwitting recipient of one of those rate hike letters, you might want to use this unpleasant news as an excuse to shop for better coverage at a more affordable price.

The reasons that auto insurance companies raise their rates are many, and often those rate hikes have nothing to do with you personally. You could have a clean driving record and no history of claims and still fall victim to a company-wide rate hike. If you are in fact a good driver with no claims history, you have even more reason to shop around for the a better deal. It could simply be that your current car insurance company is not very good at managing money and determining risk, and if that is the case you probably do not want to continue working with them anyway.

Gather Your Information

If you do receive a letter stating that your rates are going up, read that letter carefully to determine exactly when that rate hike takes effect. Chances are your premiums will not go up until your next coverage period begins, so you might have a few weeks, or even a few months, before you start seeing those higher premiums eat into your cash flow.

Your next step should be to find a copy of your most recent insurance policy. You need to have the actual policy, not just the insurance card. That is because you will need the information from the detail pages of the insurance policy to determine your current level of coverage. You should see a page that lists each type of coverage you have on yourself and your vehicles, including collision and comprehensive coverage, property damage and liability and coverage for uninsured and underinsured drivers. Note the levels of each type of coverage, as well as the deductible level for each one. You can use those coverage levels as you shop for a new, and more affordable, car insurance policy.

Compare Online

Once you have gathered as much information as you can about your current policy, your next step is to find a quality online car insurance comparison tool. There are many of these tools available, and they work by letting you enter your information and then sending that data to all the car insurers they work with. These online tools can be an excellent way to gather multiple quotes for the coverage you need.

After you have found a suitable online comparison tool, enter all the information from your current policy, including the coverage limits for each type of insurance protection. Review those entries carefully before you submit the information, since an error in those coverage levels could cause the quotes you receive to be inaccurate. After you submit your information, you should begin to receive quotes from various insurance companies, and you can use that information to find the best coverage at the lowest possible price.

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Gay Nightclub Insurance Agency on LGBT Bar and Nightclub Insurance Basics



One area in the LGBT hospitality business you do not want to skimp is insurance. Insurance can protect you and your business for a myriad of problems, from broken equipment to liability lawsuits. Depending on where your establishment is located, you will need certain types of insurance for your business. You will also need to carry certain types of insurance to satisfy your bank loans and mortgage.

The most common types of bar and nightclub insurance available include:

• Property Insurance- – Protects your property in case of fire or other events. It may not cover natural disasters, such as floods or earthquakes (see below for a policy that does.) If you have any kind of mortgage on your business and/or equipment, then you should carry a property insurance policy.

• General Liability – This is the umbrella policy that protects you in the event someone slips and falls in your venue, gets sick after eating there (whether it was your fault or not). This is a must have in today’s sometime sue-happy world.

• Liquor Liability – Most states require that any establishment holding a liquor license carry liquor liability as part of their insurance. It helps protect you if a customer has too much to drink and drives and hurts themselves or someone else.

• Automobile Liability – If you have a company vehicle, this is a good insurance to have. It may be covered in your general liability, but always check with your insurance agent first.

• Workers Compensation – Protects you if an employee is hurt at work. Most states require that all employers carry some type of workers comp.

• Unemployment Insurance – Is for your employees who no longer work for you until they find employment.

• Life Insurance – Depending on your mortgage and financing you may need to carry a hefty life insurance policy to satisfy your lender. It is also a good idea to have life insurance, in case something does happen to you and your family isn’t left with a restaurant they don’t know how to run and bills they can’t pay.

There is insurance for just about any object, action or person out there. Here are some other types of insurance you can purchase for your restaurant. But keep in mind, these extras will cost you as much or more than whatever it is you are insuring.

• Loss of Business Insurance – If you lose sales through a specific cause, this type of policy can recoup some of the income. Keep in mind the premiums and deductible may make you break even, depending on how much you lose.

• Food Contamination Insurance – If you lose power, because of fallen power lines or a storm, and the entire contents of your walk-in and freezer spoil, this policy would pay to replace the food.

• Specific Peril Insurance – This covers many natural disasters that general liability insurance doesn’t. Events like earthquakes, floods or power outages due to either, may be covered under this insurance.

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