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John P Fazzio III
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John Fazzio’s Answers

1,040 total


  • Do I pay federal income tax on my beneficiary check from an estate of...made out to me

    as a beneficiary of a estate, am I taxed on the money received. was a revocable trust amount 200k. Haven't cashed the check.

    John’s Answer

    Generally, you are not taxed on an inheritance. Estate taxes are paid by the estate.

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  • Is a lump sum support payment tax deductible?

    in a divorce financial settlement conference, i agreed to forego paying monthly support payments to my ex. Instead of making those monthly payments, it was agreed that i would make a one time, lump sum payment( approx $50K ). the lump sum paymen...

    John’s Answer

    It is a matter of federal tax law.

    Alimony -- payments to a spouse -- are income to the spouse, not you.

    Child Support -- payments to a child -- are your income, taxable to you alone.

    These are essentially immutable laws from an IRS perspective.

    Without seeing the language, I'd characterize this as a Lump Sum Alimony Payment, which is subject to tax payment by the recipient, depending on wording, etc.

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  • Need to understand tax implications of selling my property

    Events 1. Purchased property in Miami as a home owner occupant on 05/16/2012 for $163,694 with 20% down conventional loan 2. Lived there till Sept 2013 before relocating to Seattle, WA due to new job. 3. Rented the Miami house till Nov 2015...

    John’s Answer

    Mr. Souza has it right. You will be taxed on the gain. But, if you could keep it as your personal residence for two years, you'd have been able to avoid the gain tax of 15%.

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  • Will a legal separation reduce my elderly wife's and my taxes.

    My elderly wife was paying around $800 a year for property taxes. We payed this for some years after marriage. After the government found out I was below retirement age our property taxes increased to about $10,000 . Will getting a legal separa...

    John’s Answer

    You need to consult with a local tax attorney on this and bring all the information. I'm not sure why the property taxes would go up by $9,200. This is not something that happens in my state.

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  • Taxes as 1+1 or 1+0?

    I'm on a j2 visa with a valid EAD. my question is the taxes that I pay, should I enrol in 1+0 or 1+1. Don't have kids atm so it could either be one or the other. Any help will be greatly appreciated.

    John’s Answer

    Withhold the maximum. You don't want to end up owing. Better to be safe than sorry on this.

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  • Affordable Care Act Tax Penalty

    This question is for my buddy. His two family members are legally immigrating to the US in couple of months. He wants to claim them as dependents on 2015 tax return. First question, can he claim them as dependents? Second question, Can he fa...

    John’s Answer

    As I posted previously, you just need to have them comply with 50% residency/50% expense requirement and they can be dependents. The ACA may apply, but it depends on their coverage while abroad.

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  • Is it legal to gift and not pay tax?

    What is the limit on tax exemption if my spouse and I gift property to each other? We were told that we can gift property, vehicles and stocks to each other and fill out the relevant forms and save on tax.

    John’s Answer

    There is no tax on gifts between spouses.

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  • Obamacare Tax Penalty

    This question is for my buddy. His two family members are legally immigrating to the US in couple of months. He wants to claim them as dependents on 2015 tax return. First question, can he claim them as dependents? Second question, Can he fac...

    John’s Answer

    He can claim them as dependents, but the test is if they live with him more than 50% of the year and if he pays more than 50% of their living expenses. There may be a an ACA penalty, but don't get too hung up on it.

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  • Can my parents take out a mortgage/home equity loan on their paid-off home and give me the money without creating any tax issue?

    Parents are thinking of taking out a home equity loan or a mortgage on their paid-off home to help me with student loan (and other) debt consolidation. We've determined this would be the best course of action to assist with lowering loan payments ...

    John’s Answer

    You need to consult with a Tax Attorney in New York on these issues. There are a lot of options and a lot of play in what you can do.

    There are multiple scenarios. Let's just say that if they give you $100,000 outright, there will be gift tax consequences beyond the $14,000 that is automatically excluded. But, you can get $14K as a gift, tax free, each year, from each parent.

    So in Year 1 -- there can be $28,000 given to you, in Year 2 -- there can be $28,000 given to you, in year 3 -- there can be $28,000 given to you, and in year 4, there can be $16,000 given to you -- if done correctly -- with no tax consequences. Your parents, however, will be taxed when they pay back the loan.

    Before delving into this further, I'd say this... even if they have gift tax consequences, it is superior to the consequences for you if it is formulated as a loan where you pay back monthly payments. Reason being is that there is something called "Cancelled Debt Income" that could get both you and your parents into trouble. This should be avoided.

    If you are covering the monthly payment on the HELOC anyway, you are paying with after-tax income, so you will be shouldering the burden of taxes on the payment regardless. You just want to minimize it as far as possible.

    The limit on the HELOC is $100,000 for it to be subject to the mortgage interest deduction, just as only the first $1,000,000 of home purchase is eligible for the mortgage interest deduction. The idea is they don't want to subsidize millionaires buying more expensive things and getting a tax break and anyone exceeding those numbers doesn't need the tax breaks which are primarily for the middle class.

    They will get the benefit of the mortgage interest deduction on their payments if this isn't phased out. For income over about $170K you start to lose the benefit due to phase outs and Alternative Minimum Tax.

    Having you on the deed is not wise, particularly if you have derogatory credit marks for student loan and other debt. Keep yourselves financially separate. In 5-10 years, you will have good credit and can become involved with property ownership and other investments then.

    Hope this helps. It is a complex issue, but you are on the right track.

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  • If you are married and head of household what rights do your spouse have?

    If you have a NYCHA apartment before you got married and put your spouse down as family composition, what tenacy rights does the spouse have? Ultimately what determines who has the greater right if you decide to divorce?

    John’s Answer

    Pre-marital property is not subject to equitable distribution. If he/she shared in the leasehold this may alter the result. You should speak with a lawyer who deals in divorce about the consequences. Use the "Find a Lawyer" tool that Avvo has and seek a NY Divorce Attorney.

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