February, 2012 | The Beliveau Law Group

What are the tax implications of a short sale?

Additional Information: I am considering a short sale on my home in Sherborn. What are the resulting tax implications of a short sale? ATTORNEY ANSWER: Because a short sale involves the forgiveness of debt (in this case the unpaid balance of the mortgage) the seller may get a 1099-C for the amount of the mortgage deficiency. There are options available which include bankruptcy or relief if you can be considered insolvent. Also the Mortgage Forgiveness Debt

Sellers could sue after buyer’s deposit check bounced

A man agreed to buy a house on New York’s Fire Island for $1.2 million. He wrote a deposit check for $120,000, and signed a contract saying it was a cash deal and wasn’t contingent on his being able to arrange financing. However, the man told the seller that he needed some time to deposit the $120,000 in his account, and asked that the check not be cashed right away. The seller verbally agreed. After 12

Must landlords allow tenants to use medical marijuana?

As more and more states allow medical marijuana use, landlords face the question of whether to allow tenants to smoke pot for medical reasons. On the one hand, even if medical marijuana is legal under state law, it’s still technically illegal under federal law – even if the federal government is doing little or nothing to block the drug’s medical use. On the other hand, landlords are generally required to make reasonable accommodations for disabled tenants,

Buyer’s right to cancel was valid regardless of his ‘real’ motives

A New Jersey man agreed to buy a $4.5 million house, and put down a $400,000 deposit. The agreement said that the buyer had a right to conduct a radon test, and to cancel the deal if the results showed radon readings above a certain level. The radon readings came back above that level. The sellers agreed to lower the price and to install a radon remediation system. However, while the radon system improved matters, some

Protect yourself if you’re buying a house with an unmarried partner

Back in the old days, the typical homebuyer was a married couple. But today, there’s a huge increase in the number of unmarried couples who are buying a home together. It might not sound very romantic, but it’s a good idea for such couples to think about what their financial obligations will be regarding the home, and what would happen if they were to split up at some point in the future. For instance, you might

Be careful if you’re asked to sign a ‘letter of intent’

If you’re involved in the sale or lease of commercial real estate, very often you’ll be asked to sign a “letter of intent.” A letter of intent isn’t a formal lease or purchase agreement; rather, it’s a signed statement that the parties plan to negotiate a deal later that involves certain elements. Because a letter of intent doesn’t seem like a contract – it seems more like a simple handshake acknowledgement that the parties hope to

U.S. makes large home mortgages harder to get

Starting October 1, 2011, large home mortgages on expensive houses are harder to get – because the U.S. government is trying to gradually play less of a role in the mortgage market. Currently, government-related entities such as Fannie Mae and Freddie Mac guarantee or purchase the majority of home mortgages in the U.S. Lenders are much more willing to provide mortgages if they know the loan can be backed by these entities. However, the U.S. doesn’t

Do I need to amend prior years tax returns if I discover an error?

Additional Information: While preparing our 2011 taxes I realized that there has been an error in the past few year’s MA tax returns (in the government’s favor) related to our Waltham home’s property tax. What’s the likelihood we will get audited? What’s our obligation to amend the prior year’s taxes and how would we go about doing it? ATTORNEY ANSWER: The likelihood of audit is hard to judge, but States have been getting more aggressive as

Note these tax deadlines

February 15 – Deadline for providing 2011 Forms 1099-B and 1099-S to recipients. February 28 – Payers must file 2011 information returns (such as 1099s) with the IRS. (Electronic filers have until April 2 to file.) February 29 – Employers must send 2011 W-2 copies to the Social Security Administration. (Electronic filers have until April 2 to file.) March 1 – Farmers and fishermen who did not make 2011 estimated tax payments must file 2011 tax

Resolve to put your tax and financial house in order this year

The only way to achieve financial security is to monitor your tax and financial affairs throughout the year. And what better way to kick off the new year than to tidy up your financial and tax house. Here are some tips to get you started. Take control of your credit cards. Over-reliance on credit cards hurts you in several ways. With interest rates typically in double digits, it’s the most expensive way to borrow money. Think

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Beliveau Law Group

February 2012