The buyer wants out of the contract to buy my home in Quincy.

Additional Information:

The contract has been signed by both parties. I’ve already closed on my new home in the South Boston area and I was counting on this closing. I can’t afford to carry both properties any longer. What are my rights, and what are my options?

ATTORNEY ANSWER:

If the buyer defaults on the Purchase and Sale Agreement by not going through with the purchase (not because he has been denied a loan), then he faces losing his deposit to the Seller as the liquidated damages.  The deposit could be tied up if either party refuses to sign a Release of Deposit in order to release the deposit to the appropriate party.  The other option is to take the party to court to enforce the contract to purchase, but the outcome is not certain as in any litigation and the legal fees will be costly.
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Fall 2011 Newsletters

The IRS wants to audit our previously held MA corporation.

Additional Information:

We had a C Corporation which we sold in 2009. The IRS wants to audit the corporation for tax year 2008. They contacted us. We explained we have given all paperwork to the new owner. It was an entity sale and the new owner took responsibility of all past liabilities. The IRS person said they could not get a hold of the new owner. He has disappeared. So they want all 2008 tax paperwork from us. How can the IRS expect us to have paperwork for a company we’ve sold? We gave it all to the new owner!!!  What paperwork can we show the IRS proving the new owner takes responsibility of all past liabilities, including any possible tax problems? What can the IRS do to us if we can not present any 2008 paperwork? They are currently saying we are liable for $250,000!!!

ATTORNEY ANSWER:

The IRS mandates business records be retained for a minimum amount of time depending on the type of document.  If you do not have the original records or copies of them you may have to do some detective work and see if you can recreate the records.  Create a list of vendors and customers for the business from memory and start to contact them TODAY.  Ask them to provide you with all the records for transactions with your business.  Your bank should have these stored electronically so that would be my first stop.  You should hire an attorney and have them work with the businesses accountant.

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Contact us soon for a year-end tax review

An important part of our service to you is to help identify actions you can take before year-end to minimize your 2011 income tax bill. Accelerating or delaying income and deductions, contributing to retirement plans, and taking investment losses are just a few of the strategies you might want to consider. There are also tax credits that require careful planning or they may be lost. If you’d like to discuss tax-cutting options that fit your particular situation, please contact us soon for a year-end planning review.

Charitable contributions: More than just cash might be deductible

Many taxpayers give much more than just cash to their favorite charity. Many also provide their time, travel, meals, and other “out of pocket” expenses in order to assist the charity in doing good work. And while you can’t take a charitable deduction for your time, you are allowed to deduct other expenses incurred in support of a charity, such as vet bills for your local humane society, or wood and nails for a “habitat” charity.

Let’s examine your house of worship. It’s possible for members to deduct evangelism travel expenses, even if the charity (a church in this example) never initiated, controlled, supervised, or assisted with the trips. The church fostered missionary work in general. Before the trip, the church provided the taxpayers with letters of commendation serving as introductions to other interfaith groups during the trip. And after the trip, the charity publicized the member’s efforts to the other congregations. This allowed the taxpayers to deduct mileage at the prescribed IRS rate, air fare, lodging, and meals while on their missionary trip. [Read more…]

Consider four tax-smart ways to save for college

The cost of sending a child to college is daunting. According to the latest figures from the independent College Board, the total average cost for the 2010/2011 academic year – including tuition and fees, room and board, books and supplies, transportation and other sundries – for in-state students at four-year public colleges was $20,339. For out-of-state students, the average cost jumped to $32,329. The cost at four-year private colleges averaged $40,476. And costs are expected to keep rising.

Nevertheless, you can lighten the financial burden of putting your children through school by taking advantage of certain tax-favored vehicles. These techniques are generally available to grandparents as well as parents. Here are four prime examples. [Read more…]