AlPastor wrote:
....
- quote -

In general, if she is in an facility owing to needing the care (as it
sounds as if she is), the whole thing of rent/meals/care is deductible
as medical. Been thru the process /w my mother; fortunately she did
have a LTC policy that helped significantly.

All you need is a letter for your files from her attending physician
attesting that she is in need of 24/7 care. As I recall, the only
expense the nursing home charged not deducted was the TV cable bill as
it was considered an amenity by our particular accountant. (Of course,
the LTC reimbursement came off the total, but since you don't have any,
that's not an issue).

....
- quote -

It's hard to imagine any CPA or other tax professional in these days
wouldn't have experience w/ the situation. I can only recommend to
keeping looking. Perhaps you have other acquaintances or coworkers who
could have recommendations as to who they use that seemed satisfactory.
You do, of course, probably want to stay away from the shopping-mall
kiosk kind of shops that proliferate this time of year...

--

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Thanks for the reply. I've added some comments in the sections below.

- quote -

my ad hoc estimated payments but I have a few other personal issues
that I have to content with and I really do need to make this as
simple for me as possible.


- quote -

all this on a constant basis due to the fore mentioned personal
issues. I am trying to do the best I can.

- quote -

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Thank you for the reply. I've commented inline to your comments below.

- quote -

She receives approx. $775 in Soc Sec. and $1800 in alimony. She is
paying for her care ($4200/mo) out of her funds (managed by me). I am
having great difficulty determining what is deductible for her
dementia care. Some of what I've read seems to indicate the cost of
her special care is deductible but not the rent, other things seem to
indicate the entire monthly amount is deductible. Unfortunately, the
place she is living does not break out the rent from the cost of the
other care (i.e. managing her medications, bathing, dressing, eating).

As I posted to another reply, I tried to find a knowledgeable tax
professional to help me but in interviewing none seemed to know
anymore than I did about the particulars involving dementia care and
the tax ramifications. I got frustrated and decided I'd try to learn
about it and do them myself. But I am terrified about making a mistake
and costing my mom interest and penalties from her very limited
assets.

Cheers,
Pat

- quote -

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On Feb 8, 12:04*pm, dpb <n...[at]non.net> wrote:
- quote -

next. I posted to another reply, she received the house in her divorce
settlement and she did have the kitchen remodled, but she has no
recollection of how much she paid or to who and I can't find any
records to determine the cost of the renovation.

Cheers,
Pat

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Thank you for the reply. I've embedded a few comments to your replies
below.

- quote -

parents divorced and my mom received the house and I don't believe
that affected the cost basis. I was aware of adjusting for the cost of
the sale. However, I didn't know about adjusting for improvements and
this will be tricky to determine. My mom can't remember anything about
it. She had the kitchen extensively remodeled 5 years ago but I am
unable to find any records on how much she paid to have this done. So
I suppose I am out of luck in adjusting the cost basis.

As for competent professional, I hired a person to do her taxes in
2006 and found myself having to correct her work. I tried to locate
another person in 2007 but again couldn't find anyone with knowledge
about my mom's particular situation. So I did her taxes using Turbo
Tax. Any advice on selecting a competent professional. Or anyone know
of any in the Camarillo, California area? I'd be willing to go 45
miles in either direction. I need someone who is familiar with the
issues relating to dementia care (i.e. it seems very unclear to me
what is needed to deduct the cost of her care to satisfy the IRS). She
lives in a $4200/mo dementia care facility and needs help remembering
to eat, dress, bath, etc. The bill from the place doesn't break out
what is rent and what is care.

Again, thank you for your time in sending a reply.

Cheers,
Pat

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Feb 8, 12:01*pm, "Mark Freeland" <BnetOne...[at]sbcglobal.net> wrote:
- quote -


I am relying on the safe harbor rule for 2007 as I discovered my mom
had been sold an annuity (when she was 72!) paying 2 3/4% which I had
to get her out of. The resulting 10k gain was not accounted for in my
estimated tax payment for 2007. But I did make sure and pay 110% of
2006 taxes so she won't be penalized. However, now I believe that
makes paying 110% for 2008 skewed as the 2007 tax due will be
artificially high due to the closing out of the annuity. But, of
course, with the house selling in 2008 I need to be sure to pay enough
taxes. Sorry if that wasn't clear.

So, it sounds to me like the best way to handle this is to pay 110% of
2007 taxes and pay any remaining capital gains tax with her 2008
return.

Cheers,
Pat

========================================= MODERATOR'S COMMENT:
When responding to a post, please delete those parts of the prior post
that are not necessary to context, or are not the parts to which you are
responding. Thank you for your assistance.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

William Brenner wrote:
- quote -


- quote -

Quite possibly yes (if there is no long-term care insurance to cover the
bill). On the other hand, if the estimated taxable home-sale gain
really is $400K, and the annual cost of dementia care plus other
deductible medical expenses is, say, $100K, then probably not. Really,
it's still a timing issue -- withholding and equal quarterly estimated
payments are simpler when avoiding any underpayment penalty than are ad
hoc estimated payments.

This brings us back to the first sentence from the OP. As a POA, he or
she should strive for what's best for mom, not what's simplest for him
or her. (IANAL). Matching the estimated payments to the income is the
optimum solution.

-Mark Bole

--
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AlPastor wrote:
- quote -

Depending on the mother's income, and whether the payment for her
presumably acute care comes from her funds, might not her medical
deduction be of a magnitude that would greatly reduce -- if not
eliminate -- any tax obligation other than possibly for the house
sale?

Should this be the case, might there be justification to reduce or
even eliminate estimated payments pending sale of the house?

Bill

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dpb wrote:
- quote -

I came back to mention the possibility of the step-up in basis in case
of a previously deceased spouse but see somebody else already mentioned
it...

--

--
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AlPastor wrote:
....
- quote -

See Pub 523 for the full scoop, but there's at least a $250K exclusion
(maybe $500K if married) and the eligibility rules for ownership and
residence are relaxed in cases of disability. The rule for estimated
payments, etc., are also discussed. In general, I'd not worry about
prepaying at all--if the worksheet shows you may need to pay some
capital gains, I'd just wait and plan on holding out some of the
proceeds in the quarter following the sale. Of course, make sure you're
accounting for all possible increases in basis when you make the
calculations -- significant renovations, etc., as well as just the
initial purchase price can make a big difference.

http://www.irs.gov/publications/p523/ar02.html#d0e2017

--

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"AlPastor" <pjtallman[at]sbcglobal.net> wrote in message
news:fa2dade3-c62e-4184-93a1-8845b53b8066[at]s37g2000prg.googlegroups.com...
- quote -

There are at least a couple of ways to handle this. I believe you can rely
on the safe harbor rule (100%/110% of last year's taxes paid in estimates),
and then pay the rest with the return in 2008. See the instructions for
Line 14c of the estimated tax worksheet on p. 21 of Publication 505.

Another way is to make estimates according to the income generated in each
quarter (or more - the IRS is always happy if you pay up front, as you've
been doing). There is a tax form, 2210, that contains schedule 2210AI
(annualized income). This lets you show the IRS that you've paid at least
as much as you were supposed to according to your income on a
quarter-by-quarter basis.

The latter is not a simple form to deal with (it's not complex, but breaking
down income and expenses on a quarterly basis can be tedious). Simply
paying 100%/110% of last year's taxes is likely the easier approach. It
will also likely result in your paying less money up front.

Mark Freeland
BnetOnewX[at]sbcglobal.net

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AlPastor wrote:
- quote -

First be sure you are properly accounting for taxable gain from the
house sale. If she jointly owned the property with a deceased spouse,
then she may have a "stepped-up" basis on half of the property when she
inherited it (or maybe all of it, in a community property state).
Adjust for cost of sale, any improvements made over the years, and so
on. Finally, she most likely will qualify for the section 121 exclusion
of $250K gain from taxes for a single filer. (I'm making some
assumptions here, a competent professional should be able to guide you
further).

As for estimated taxes, you can time the estimated payment against the
income. For example, if the sale completes after Sep 15th, then both
the income and corresponding estimated tax payment will only count for
the fourth "quarterly" payment, due Jan 15th 2009.

The mechanics of making the payment is simple, you can find blank
vouchers at the IRS web site or from any tax prep software. In fact, I
suspect that if you simply send in a check to the correct IRS address
for your location, payable to U.S. Treasury with "2008 Form 1040-ES" and
her taxpayer ID (SSN) shown on the check, the IRS will properly credit
it to her account as of the date received.

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I have power of attorney for my mom's finances. She had to move into a
dementia care unit and my family has put her house up for sale. As
everyone knows the real estate market is very slow and I have no idea
when it will sell. My question is how to handle estimated taxes for
2008.

Specifically, if I pay estimated taxes as I always do for her and then
the house sells in 2008 and she makes, say 400,000, can I wait until I
do her 2008 taxes to pay the capital gains? If not, how do I go about
making an "extra" estimated tax payment? I should tell you that I
always pay her entire estimated tax with the first installment to keep
things simple for me.

Thanks to all in this group as you have always helped me with
questions in the past.

--Pat

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >