Multi-generational families are facing zoning problems

A growing number of families want to live in a home along with elderly parents or “boomerang” grown children – but they may run into problems with the local zoning board.

Some 18% of Americans now live in a home with more than one adult generation, and that figure is growing. In many cases, what families want is a home with an “in-law” apartment – one that has a separate entrance, separate kitchen, and separate utilities. The idea is that the family can live together, but the elderly parents or grown children can nevertheless have a measure of independence.

Home builders say there is strong demand for this type of arrangement. The problem is that such structures are often banned by zoning laws in residential neighborhoods. [Read more…]

Congress extends homeowner credits for energy improvements

Congress has extended a number of tax credits for homeowners who make energy-efficient improvements to their home, as long as the equipment they install is certified by the manufacturer as qualifying for the programs. The credits fall into two categories:

(1) Traditional improvements

You can get a credit for 100% of your expenses for central air conditioners, electric heat pumps, and a variety of water heaters (up to $300); natural gas, propane, and oil furnaces and hot water boilers (up to $150); and furnace air circulating fans (up to $50). [Read more…]

New rules if you buy real estate from a foreign owner

Did you know that if you buy real estate in the U.S. from a foreign owner, you may have to withhold a big chunk of the sale price and send it to the IRS?

This is required by a law called FIRPTA (the Foreign Investment in Real Property Tax Act), which is designed to make sure that foreigners who sell U.S. property don’t skip off without paying taxes.

In the past, a buyer generally had to withhold 10% of the sale price and send it to the IRS. Effective February 15, 2016, the withholding rate has gone up to 15%. [Read more…]

‘Underwater’ homeowners may get mortgage principal reduced

Some 33,000 homeowners across the country will be eligible to have the amount of their mortgage principal reduced under a plan recently unveiled by the Federal Housing Finance Agency.

This is a different plan from the government’s better-known HAMP and HARP programs. HAMP (the “Home Affordable Modification Program”) focuses mainly on reducing monthly payments rather than forgiving principal, while HARP (the “Home Affordable Refinance Program”) is designed to help underwater homeowners refinance their loans. [Read more…]

Can landlords refuse to rent to tenants with a criminal record?

Benigno Herrera, a 70-year-old man in Austin, Texas, was turned down when he tried to rent an apartment recently. The reason? He had a drunk driving conviction on his record – from 36 years ago.

Cases like Herrera’s are coming up much more frequently, and raising legal questions about how far landlords can go in using criminal background checks to screen potential tenants.

The issue is reaching a boiling point for two reasons. One is that it has simply become much easier for landlords to perform these checks. In the past, landlords had to hire an investigator or go through local court records, but today, they can often just perform a simple computer search. [Read more…]

How Medicaid’s look-back period works

Medicaid’s look-back period can be confusing, but it’s important because it can have a very significant effect on your ability to pay for long-term care.

Unlike Medicare, Medicaid is a system that’s available only to people who have very few assets. As a result, the government is concerned that people will “game the system” by giving away all their assets to family members and then applying for Medicaid shortly afterward. That’s obviously not fair to the taxpayers who support the system.

So Medicaid imposes a penalty on people who transfer assets without receiving fair value in return. [Read more…]

Guardianship abuse leads to calls for reform

The growing problem of adult guardianship abuse is giving rise to calls for reform, as vulnerable elderly people caught up in this system sometimes end up being harmed and exploited by the very process that’s supposed to protect them.

A guardian is someone appointed by a court to make decisions on behalf of an incapacitated person, known as a “ward.” The process usually starts when a family member or social worker notifies the court that someone can no longer take care of himself or herself. If the court decides that the person is incapacitated, it often appoints a family member as guardian. However, if the family can’t agree on a guardian, or there’s no family member to serve, the court may appoint a public guardian. Public guardians are supposed to be neutral individuals hired to act in the ward’s best interest. [Read more…]

Has Medicare dropped coverage of your drugs?

Medicare prescription drug plans can change which drugs they cover, possibly leaving you without coverage for a drug you need. Or you might switch plans, and find that your new plan doesn’t cover your medication at all. In these circumstances, it’s good to know that Medicare drug plans are required to offer you a 30-day transition supply of the drug you’re taking.

All Medicare Part D plans must offer these transition refills, including Medicare Advantage plans with prescription drug coverage. Plans must provide a 30-day supply of an ongoing medication (unless a lesser amount is prescribed) within the first 90 days of plan membership or within the first 90 days of the new contract year. [Read more…]

What you need to know about required distributions from your IRA or 401(k)

The oldest of America’s 75 million baby boomers are turning 70 this year. That means the IRS will soon be requiring them to start cashing out their tax-deferred retirement savings accounts. How you handle these withdrawals can have a profound effect on your own retirement and on what you leave to your heirs.

As a general rule, if you don’t need the money in these accounts to live on, it can be wise to keep as much as possible in them, rather than withdrawing it. This can reduce your income taxes, plus there can be significant tax advantages in leaving money to your heirs in a tax-sheltered account rather than giving it to them outright.

Here’s a look at the rules: Once you turn age 70½, the IRS requires you to take “required minimum distributions,” or RMDs, from your IRA and 401(k) accounts. You’ll also have to pay income tax on these withdrawals. [Read more…]