Monday, December 8, 2008


As I had mentioned, last week I attended the annual National Association of Tax Professionals year-end tax update workshop – now called “The Essential 1040 Workshop”. I attend every year. There are two separate one-day programs – the first being the basic update and the second covering specific topics. I have often attended both days, but this year booked only the basic update.

I choose to attend the workshop being offered at Caesars Atlantic City. I have been going to AC in December for several years now – usually for the National Society of Tax Professionals year-end seminar. But this year I decided that attending both year-end classes was redundant.

The “published” room rate for workshop attendees was $95.00 per night – but of course the room cost more than $95.00 per night. With taxes and fees it was actually $112.60 per night. I wish that NATP, and every other conference provider, as well as every hotel and motel, would publicize/advertise the true room rate!

I probably could have gotten a special package at the Tropicana for close to half what I paid at Caesars – but I would have to schlep too long a distance from hotel to workshop. And, anyway, I have always wanted to stay at a Caesars hotel.

Caesars Atlantic City is directly connected to the Bally’s Wild West Casino, which is directly connected to Bally’s Atlantic City Hotel and Casino (Caesars and Bally’s both owned by Harrah's Entertainment). If there is a workshop at Caesars again in the future I will look into a package at Bally’s.

I was originally going to take the local casino bus to Caesars and the NJ Transit bus home (as I had done in past years) – but I was running late on Tuesday morn, missed the AM bus, and decided to drive. This was actually much “more better” – it was much less “out of pocket” (only $10.50 parking and tolls and about $20.00 gas) but will provide a greater tax deduction (258 miles round trip at 58.5 cents per mile)!

The ride was smooth and relaxing – no traffic. Basically Garden State Parkway to Exit 38, which is the Atlantic City Expressway. The entrance to the Caesars parking garage was a few feet from the end of the ACE. The walk from the garage to the hotel lobby (and from the lobby to the workshop room) was minimal – I did not have to schlep all over creation as I have done with some casino hotels. The room, while not the biggest, was “just right” – even though its view was of an air conditioning duct. And a walk-in shower instead of a tub – so no leisurely soak. But it did have a huge flat-screen tv!

Because I was in AC on Tuesday and Wednesday nights the hotel restaurants were closed and my only “in-house” option was the buffet – where I dined Tuesday night. Wednesday night it was the Virginia City Buffet at Bally’s Wild West (I had been there once before several years ago) – the better of the two buffets.

I had followed the walkway to “The Pier at Caesars” (formerly the Ocean One Mall – but a lot more upscale) and checked out the restaurants on the third level. None of the menus interested me – and besides they were much too expensive. I had hoped to dine at
The Trinity Pub and Carvery, but, as is too often the case in the US, the “shepherd’s pie” on the menu was not shepherd’s pie (sheep and mashed potatoes) but cottage pie (beef, onions, peas, and mashed potatoes) and nothing else interested me for the price.

While at the Pier I did watch the impressive Water Show - “the world's largest indoor fountain matrix of 150 individually controlled fountain nozzles, a 19,000 gallon reflecting pool, 179 LED and intelligent lighting fixtures, which create illuminated water effects with infinite color possibilities, and state-of-the-art audio technology” which is complimentary to the public and runs every hour on the hour.

Also because I was in AC on a Tuesday and Wednesday there was no show at the hotel. I probably could have found a review at one of the other casinos, but I didn’t want to schlep all over the Boardwalk.

But this is a tax blog and not a travel blog – so let me get to the content of the workshop itself.

The annual seminar always begins with a review of the new "numbers" for the current year’s Form 1040, in this case 2008 – exemptions, deductions, credits, phase-outs, etc. I had learned all this information back at the end of 2007 when writing the WHAT’S NEW FOR 2008 Page for, so this is really of no value to me. I attend for the review of new tax laws and “recent developments”.

Here are some reminders and items of interest I took away from the workshop –

* The standard mileage allowance for business travel cannot be used for a vehicle used for hire (like a taxi). However, according to Chief Counsel Advice 1997-40 vehicles used to provide courier services are not considered to be vehicles used for hire. One is hiring the service of a courier and not the use of a car.

* In the past an unmarried surviving spouse could only exclude up to $250,000 in gain on the sale of his/her personal residence if the residence was sold after the year of death of the deceased spouse.

But now, under the Mortgage Forgiveness Debt Relief Act of 2007, effective with sales closing after December 31, 2007, a surviving spouse who sells a principal residence within two (2) years of the date of death of the deceased spouse can exclude up to $500,000 of gain under Internal Revenue Code Section 121 as long as the ownership and use tests were met immediately before the death of the spouse.

* The amount of cancelled “qualified principal residence indebtedness” that is exempt from taxable income is limited to “acquisition indebtedness” – debt incurred in acquiring, constructing, or substantially improving the taxpayer’s principal residence. Refinanced debt will qualify only up to the extent that the principal of the previous mortgage would have qualified immediately prior to the refi.

Mortgage or home equity debt that was used to pay off credit cards, pay for college, buy a car, or any other reason that has been forgiven is not excluded from income.

I was premature in my post “What’s Wrong With This Picture” when I said “George W and his colleagues in Washington in their infinite wisdom have passed a law that exempts the $200,000 in mortgage debt forgiveness for Couple B from federal income tax”. In that example the bulk of the $200,000 that Couple B walked away from would not be exempt from income tax under this new law. Although if they were considered to be “insolvent” because they used the money to pay off credit cards and/or auto loans and to generally live above their means they could avoid the tax using the insolvency as an excuse.

* A person who was claimed as a dependent on his/her parents’ 2007 Form 1040, possibly because he/she was a full-time college student, did not receive an economic “stimulus” election year bribe check in 2007. However if that same person becomes independent and able to claim himself/herself on their 2008 return they will be able to claim a refundable “recovery rebate credit” of up to $600 on the 2008 Form 1040.

Similarly, it is possible that a couple received a $300 additional rebate for a 16-year old dependent child claimed on the couple’s 2007 Form 1040 and the same dependent child will receive a $600 refundable credit on his/her own 2008 return filed as an independent taxpayer (i.e. his/her parents do not claim an exemption on their 2008 return).

* The IRS will be sending out Notice 1378 to taxpayers to report the amount of the economic “stimulus” election year bribe payment issued in 2008. It is very important that you give this Notice to your tax professional along with your 2008 “stuff” (I hope my clients are reading this).

*Under final regulations issued by the IRS a copy of a court order or divorce or separation decree or agreement that includes the same language as the Form 8332 will no longer be acceptable as an alternative to Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent). Only the actual Form 8332 or a similar document containing the same information that is specifically written for the sole purpose of serving as a written declaration in lieu of the Form 8332 will be acceptable.

Unfortunately the workshop included the ridiculous mandatory redundant 2 hours of ethics – as does apparently every single federal or state tax seminar that is offered. But luckily the instructor scheduled the discussion for immediately following the lunch break, which allowed me to watch DAYS OF OUR LIVES and part of AS THE WORLD TURNS in my room instead!

I am sure you are all waiting to ask one question – did I win or lose in the casino? From my point of view I was a big winner. I didn’t gamble a single penny (although there were penny, and nickel, slots available), so I didn’t lose a single penny!


1 comment:

Anonymous said...

I had real plesure of board walk an year ago on a newyear eve.It is an unforgettable time in my life.I wish another visit by next year( business tour).