BEWARE IMPENDING STATUTE EXPIRATION

Folks who may still be pondering what they did in their 2011 Federal income tax return, and whether it was right or not, or maybe even questionable, though now looking like there’s room for interpretation in their favor, had better get on the ball.

The statute of limitations on the 2011 tax year (for folks who extended their returns that year until October 15, 2012) will expire come this October 15, 2015.  So if you think you may need or want to file that 1040X (amended individual return) you had better get on the ball right away!

Sad That Summer’s Ending? At Least Home Burglaries Should Go Down!

BurglarI just came across an interesting report from the U.S. Department of Justice, indicating that the rate of home burglaries is significantly and consistently higher in summer than in the other three seasons of the year.

The report didn’t explain the reasons, but we can easily guess: Many homeowners take vacations during summer and leave their homes empty for days or weeks at a time; more people are typically out on the street during summer, providing cover for burglars hanging around to watch patterns of activity in the neighborhood; and, of course, no sensible burglar wants to, say, climb a ladder into a house during a rainstorm, or leave footprints in the snow.

Fortunately, Nolo has a number of helpful articles on how to protect your property from burglary, including:

You’ll especially want to read these if you’re planning any late-summer vacations! (Have a lovely trip.)

NO CAPITAL LOSS DEDUCTION AGAINST ANNUITY INCOME

In the recent Tobias decision, the Tax Court rejected a couple’s argument that they could offset the income they would otherwise have recognized on an annuity distribution by the capital loss they incurred when they sold securities in order to purchase the annuity in the first place.

In order to buy the annuity in 2003, the taxpayers sold securities for which they incurred a taxable loss of $158,000. Then in 2010, after the annuity contract had accrued substantial income, the taxpayers withdrew a portion of the annuity balance to fund the purchase of a residence, and did not report any of the annuity withdrawal as income.

They argued that the otherwise recognizable income was a capital gain and thus should be offset by their capital loss carryforward (remaining from the originally sustained $158,000 loss). The taxpayers thought much of the “income on the contract” likely resulted from capital gains realized by the insurance company that issued the contract and/or that IRS should look at the $158,000 capital loss from 2003 as part of the cost of the annuity purchase.

“No way,” concluded the Court.

Immigrants Whipsawed by Ever-Changing U.S. Laws and Regulations

The series of legal and policy shifts that immigrants in the U.S. face is seemingly unending. Or maybe “seemingly” is too mild a word.

Try Googling the terms “immigrants whipsawed,” and you’ll find headlines both recent and ancient, all saying basically the same thing: Any immigrant trying to plan his or her life in the U.S. had best be prepared for delays, turnabouts, inconsistencies, and all-around frustration.

In the latest example of this phenomenon, F-1 students pursuing degrees in science, technology, engineering, or mathematics (STEM), whom DHS previously found eligible for an extra 17 months of a work status called optional practical training (OPT), may not be able to receive those extra 17 months after all. The U.S. District Court for the District of Columbia decided that the Department of Homeland Security (DHS) hadn’t followed proper procedures when it created the extension. Luckily for students, it gave DHS some extra months to redo the regulation, as described in Nolo’s update, “Extra 17 Months of Optional Practical Training for STEM Students in Jeopardy.”

Non-citizens who had successfully applied for Deferred Action for Childhood Arrivals (DACA) status weren’t so lucky. Many of them had received three-year work permits under President Obama’s latest Executive Order. However, a federal court decision blocking implementation of that order resulted in them having to actually mail their three-year work permits back to USCIS. (These were to be replaced with two-year work permits that USCIS would send out automatically – let’s hope that worked out.) What a bother, not to mention a source of confusion for both immigrants and their employers.

But these DACA recipients are still better off than the immigrants who were hoping to receive Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA). This was (or perhaps is, after it wends its way through the court system) another program created by Executive Order. But it’s still on hold, ever since a federal district court in Texas granted a preliminary injunction against it.

How ironic that one of the 100 questions on the U.S. naturalization exam, which is given to prospective new U.S. citizens, is “What is the ‘rule of law?’” Acceptable answers include, “Everyone must follow the law,” “Leaders must obey the law,” “Government must obey the law,” and “No one is above the law.” Too bad no one seems able to decide what the law says, and stick to it for more than five minutes.

NINTH CIRCUIT LIBERALIZES MORTGAGE INTEREST LIMITS FOR UNMARRIEDS

The Ninth Circuit recently reversed the Tax Court, concluding that the Code Section 163(h) limitations ($1 million of acquisition indebtedness and $100,000 of home equity indebtedness) should be applied on a per individual basis, and not on a per residence basis. As such, unmarried co-owners are subject to a maximum of $2.2 million in limitations, rather than $1.1 million. See Voss v. Comm.