2008 Tax Changes — Number 1

Important facts on buying new, heavy SUV's. Although you can not take the $25,000 extra depreciation under section 179 there is a special 50% bonus depreciation. If your firm or yourself buys a new $50,000 SUV with a loaded weight of over 6,000 pounds and puts it in service in 2008 you can expense 50% of the business use portion. If you use the vehicle 100% for business you can deduct $40,000 the first year. Used vehicles cannot use the bonus depreciation.
1. Fiscal year corporations can take the entire bonus depreciation if purchased in 2008.
2. Depreciation for new autos put in use in 2008 is also higher. $10,960 the first year. For used autos it is $2,960. Second year is $4,800 for all autos.
3. Amounts for Autos costing over $18,500, that are leased will also get a bigger tax break.
Section 179 expensing has also been "turbo charged". The new law passed on Feb.13th doubles the maximum annual deduction to $250,000 from $125,000. It also increased the phase-out threshold to $800,000. This provision is for 2008 only.
IRS okays new safe harbor for swapping vacation homes. A vacation home may be a house, condominium or similar dwelling that provides basic living accommodations including sleeping space, bathroom and cooking facilities. Two main parts must be met.
1. The relinquished property must be owned by the client for at least 24 months after the exchange.
2. For both the two 12-month periods immediately preceding the exchange (Could straddle multiple calendar tax years) the client must: Rent home at fair rental price for 14 days or more and personal use must be less than 14 days or 10% of the total days that the home is rented. (at a fair rental price).
New rules on inheriting parents 401k plans. Congress has lifted some of the restraints.
1. The funds must go directly from the 401(k) plan to the trustee of the client's IRA.
2. The payout must be transferred to a new IRA.
3. The IRA account must be properly titled.
4. A nonspouse beneficiary can't wait until after age 70 1/2 to begin taking the required minimum distributions from the IRA.
Use new mortgage relief form 982 for exclusion of potentially $2,000,000 of debt forgiveness on a principal residence.

Maurice M. Glazer CEO

Glazer Financial Network

800-999-8931

830-392-0643

Please call or contact us for additional Information

Best Regards,

Maurice M. Glazer, CEO

Glazer Financial Network

Previous Editions of Tax Insights

Tax Insights — March 2008
Tax Insights — Sept 2007

Additional Information

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