Worthless Employee Stock Renting Your Residence Tax-Free Exchange of Real Properties Loss on Gift of Stock Tax Filing Involving Foreign Property[an error occurred while processing this directive][an error occurred while processing this directive] [an error occurred while processing this directive] I received a stock award valued at $8,350 (5000 shares at a FMV of 1.67). I elected the 83(b) option in year 2000 and paid tax. The company went belly up in 2002 and the stock that I previously paid taxes on was worthless. How do I claim this stock loss on my 02 return? [an error occurred while processing this directive] You will declare a capital loss on Form 1040, Schedule D (probably $8,320 or so) - either short-term or long-term depending on whether you held the stock for 12 months or longer before it became worthless (in which case it would be long-term). [an error occurred while processing this directive] See The Tax Prophet Section on Stock Options [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] May I rent my home to my business for monthly meetings (12 days a year) and not claim the rental income on my personal tax return? [an error occurred while processing this directive] As long as you rent real property to an independent third party for less than 14 days a year, you do not pay taxes on the income. However, if you rent your home to your business, the government could disallow the transaction as a sham, because the transaction lacks economic reality. [an error occurred while processing this directive] See The Tax Prophet Class on Real Estate [an error occurred while processing this directive][an error occurred while processing this directive][an error occurred while processing this directive] [an error occurred while processing this directive] I would like to purchase real estate and keep trading it for other real estate, but my real estate agent said that a Section 1031 exchange would not work. They said that after we sold the first property, we had to hold the second property for two years prior to sale. A friend of mine told me that this was not true if we were an LLC. [an error occurred while processing this directive] Under IRC Sec. 1031, you hold property for investment not as a residence, so the two-year rule does not apply. However, you need to exchange property held for investment for another property also to be held for investment. Quickly buying and exchanging properties without holding them for investment could disqualify Sec. 1031 treatment. Note: While there is no math formula for the length of time you must hold the replacement property, usually a holding period of at least 12 months is considered safe. [an error occurred while processing this directive] See The Tax Prophet Tax Class on Real Estate [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] I sold stock for my daughter and she incurred a capital loss in 2002. However, she does not have much income and I'd like to combine her 2002 capital loss with my existing 2002 losses and another daughter's capital gain. Can I do this? [an error occurred while processing this directive] If this was your daughter's stock, then she's treated as a separate taxpayer and you cannot combine her loss with gains earned by yourself or another child. Your daughter may carry forward the loss to future years under the capital loss carryover provisions. Capital losses may offset capital gains, plus up to $3,000 of ordinary income, per year, on a going forward basis. [an error occurred while processing this directive] Use The Tax Prophet Search Engine to find Similar Issues [an error occurred while processing this directive][an error occurred while processing this directive][an error occurred while processing this directive] [an error occurred while processing this directive] I am an H1B visa holder. I bought a home in my country of nationality and pay mortgage interest on the home. May I deduct the interest when I file my U.S. taxes? [an error occurred while processing this directive] I assume you are a U.S. taxpayer. If so, then you can deduct qualified interest on a first or second residence, so, if the property in India qualifies as either a first or second residence (it is used by you or your family as a home and is not rented out as investment property), then you can deduct the interest, provided it is qualified interest (defined by the tax code). I have articles on my website discussing this issue. Also, check out the IRS website, www.irs.gov for on-line and interactive publications that can assist you. [an error occurred while processing this directive] See The Tax Prophet Section on Foreign Taxpayers [an error occurred while processing this directive][an error occurred while processing this directive][an error occurred while processing this directive]