Sorry for being off-topic, but WOW! Really? Only $70 off their property tax bill?
Where I live (Alabama) a homestead exemption reduces our assesed home value from 20% ot 10%. I save $1000s every year by having a homestead exemption.
Perhaps I am misunderstanding something...
I do my own 1099 forms on a laser printer. I set them up in a word processor as large labels. It took a fair amount of fiddling the first time to get them to print in the right place (the smallest package of 1099 forms from Staples has far more than I ever use, fortunately) but the changes from year to year are petty minor.
Regards, John Levine, snipped-for-privacy@iecc.com, Primary Perpetrator of "The Internet for Dummies", Information Superhighwayman wanna-be,
It's California's Prop. 13. From Wikipedia:
"Under Proposition 13, the annual real estate tax on a parcel of residential property is limited to 1% of its assessed value. This 'assessed value,' however, may only be increased by a maximum of 2% per year, until and unless the property is resold." (or improvements are made to the property, which are added to assessed value at cost).
In addition, some counties allow older homeowners to "transfer" their low assessed value from former home to new home.
The homestead exemption reduces assessed value by $7,000, hence about $70 off the annual bill. (I say "about" because local special assessments can result in a tax bill that is more like 1.2%).
In other words, in California the benefit of "locking in" a property tax amount based on your purchase price will over time dwarf any homestead exemption benefit -- assuming that "over time" includes a period of net rise in property values, unlike the last two years and next year.
Interestingly, this also allows a convenient technique for identifying taxpayers who might be incorrectly deducting mortgage interest on more than $100K of equity debt -- if their property tax is relatively low compared to their mortgage interest deduction, that is a strong indicator they have owned the house for a long time and have "cashed out" in one or more re-finances without plowing the money back into the house (which would raise the assessed value and thus the property tax).
-Mark Bole
The forms I buy at Staples comes with software that takes care of this without any fuss.
That's fine; then, since receiving money isn't your motive, you don't mind that a chunk of it goes to the IRS.
More seriously, the IRS taxes income independent of motive. (Whether losses are deductible does dependon motive.)
Seth
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