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12:46

[Comment From bcg1]
hi cindy -- if i buy a computer to help me learn new programs of which I'm using to train myself to find a new job, is that computer purchase deductible in any way?

12:51

Cindy Brandt - Hi,
The purchase of the computer would be considered "job hunting expense" and would be deductible as a miscellaneous itemized deduction subject to the 2% floor. What this means is that you would only get the deduction to the extent that all of your miscellaneous itemized deductions exceeded 2% of your income. Make sense?

12:58

[Comment From Guest]
Hi, my husband was laid off in Jan. 2008 and given six months of Cobra payments as part of severance. This money was paid directly to him, and we were billed for the monthly Cobra. During this six months he was working as a consultant. Then he went on unemployment and we continued to pay Cobra. I am confused about whether we can deduct the Cobra payments we made for any or all of this time period. If he was self-employed, family health insurance is deductible, right? And when unemployed he would have taken consulting work if he could have gotten it, so can that time period (when collecting unemployment as no consulting income was coming in) be included as well? Lastly, are dental and vision plans considered part of health insurance?

1:08

Cindy Brandt - I am getting an awful lot of questions from people who have been laid off. I hope that some new tax benefits might be forthcoming that will assist people finding themselves in this unfortunate situation but under the current law the benefits are few and far between.

As for COBRA payments, for those who are laid off from a job, they are only deductible as an itemized deduction. Therefore, the COBRA payments along with all other deductible medical expenses, have to exceed 7 anbd 1/2% of your adjusted gross income to be deductible. For example, if your adjusted gross income was $50,000.00 you would have to have medical expenses in excess of $3750 and they would only be deductible to the extent that they exceed that amount. So, if you had $5000 of deductible medical expenses you could deduct $1250. Dental and vision plans are deductible as well.

1:08	[Comment From Kathleen] I meant to add "thanks!" and put a name in the name box before I sent my question about Cobra.

1:09	Cindy Brandt - Hi Kathleen, I hope I answered your question!

1:09	[Comment From Jeremy] Hi Cindy:

1:09	Cindy Brandt - Hi Jeremy, Did you have a question for me?

1:10

[Comment From Jenn]
Hello! In 2001 me, my brother, and my step-father inherited my mom's home when she passed. Although my step-father lived in the home until we sold it in Dec. 2008, neither my brother nor I lived there during any of this time. While my step-father can take the $250,000 capital gains exemption because he lived in the home, would either my brother or I be able to take it?

1:15

Cindy Brandt -

Hello Jenn,

Unfortunately, the exclusion for principal residence only applies to where you live. However, because you inherited your mother's home, you are eligible for what is called a "stepped up basis". What this means is that you and your brother only have to pay tax on the difference between what your share of the house was worth on the date that your mom passed away and what it was eventually sold for. Say, for instance that it was worth $150,000 on the date that she died, each of you would have a cost basis in the house of $50,000. If it was then sold for $180,000 you would each pay taxes on $10,000.

1:15	[Comment From Cheryl] I am married and our home is only in my husbands name. Last month I bought a condo just in my name. I am a first time home buyer. If I file my taxes with my husband am I entitled to the 8000.00 tax credit?

1:18

1:19	Cindy Brandt - Gonna leave for 5 minutes - to warm up my lunch - be right back!!

1:25

Cindy Brandt - Hi Cheryl,
You have not really given me enough information to fully answer your question. However, I will tell you that the qualification for this credit hinges on whether or not it is your principal residence. If you and your husband live together in the home that he owns, that is your principal residence and the condo would not qualify.

1:26

[Comment From Jeremy]
Hi Cindy, I relocated to NJ from MA in 2007. I replaced my septic system prior to selling and was able to take a 10% tax credit on my 2007 MA tax return. Am I now out of luck on the balance of the 40% tax credit I was entiled to because I no longer have MA taxable income? Thanks.

1:28	Cindy Brandt - Hi Jeremy, If you don't have any income from Massachusetts you are no longer required to file a tax return in Massachusetts or pay Massachusetts tax. Therefore, you have no tax to reduce with a credit, so, you would forego the balance of the credit.

1:28	[Comment From Guest] hi cindy- if i had a new roof done on my two family house . how is that file on my taxes ?? thank you...

1:30

Cindy Brandt - A roof is generally considered an improvement. As such, it is depreciated over time. If the entire roof was replaced then 50% of it would be attributable to each side of the two family. If you live in one half and rent out the other then you would be able to depreciate 50% of the cost of the roof and deduct that from the rental income. The other half would not be deductible as it is attributable to your personal residence.

1:30

[Comment From Guest]
Cindy - In light of the current economic conditions, do you forsee any losening of the IRS rules on early withdrawals from IRA and 401k accounts? Seems kind of crazy that I can take money out without penalty for a nose job or to buy a vacation home, but if I need to take money out to pay my rent or to feed my family - they charge me a 10% penalty.

1:34	Cindy Brandt - Unfortunately, I haven't heard of anything yet, but that doesn't mean it won't happen. I expect to see a lot of changes in the tax laws for 2009 but so far, that's not one of them.

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