Answer: The IRS does not get involved in personal situations, but an expert at the agency advises that the executor needs to fulfill her responsibilities, which include filing the decedent's final return (assuming the decedent had a filing requirement). Since her father died in 2006, his final return should be filed by April 15. See IRS Publication 559, "Survivors, Executors, and Administrators." He also suggested reading TeleTax topic 356, Decedents, which is also available online at http://www.irs.gov/taxtopics/tc356.html.
In general, income earned and deductible expenses paid prior to the date of death would go on the decedent's final return. For items after that date, the tax laws typically require you to report your income and allow you to deduct certain items if they were billed to and paid by you. How specific items were held, billed and paid in this particular instance is a personal situation that the family should discuss with the executor and their tax advisers.
Q: In a recent article, you indicated that with condos you can deduct depreciation, repairs, upkeep, dues, interest and taxes as well as assessments for the care of the common areas. My condo has taken out a loan in order to replace building defects. We are paying for the interest on the loan with special assessments and an increase in maintenance fees. Are any of these deductible on either the state or federal levels? Where do you suggest I can find the special rules that apply to condominiums regarding what is and what is not deductible? Any guidance you can provide would be appreciated as I have never lived in a condo before, and as a senior citizen I do not know where to get these answers. Ben Suntag, Rockaway N.J.
A: From your question, it is difficult to determine if you are an owner who is using your apartment as your personal residence, a tenant who is renting the condo or an condo owner who rents out the property as rental property. This is important, because only an owner who is renting the property is allowed to deduct depreciation, repairs, upkeep, dues, maintenance fees, etc.
For guidance on what is deductible for someone who rents a condominium to others, see IRS Publication 527, page 4, third column, at: http://www.irs.gov/pub/irs-pdf/p527.pdf
It explains that assessments for the care of the common parts of the structure are deductible as an expense. Special assessments for improvements are not deductible as an expense but may be depreciated.
Feedback
The fact that a builder has sold a few houses in a neighborhood for substantially lower prices should have no effect on the appraised value of reader Will Denison's home. See previous Realty Q&A.
According to the Fannie Mae Single Family Selling Guide, Part XI, Section 406, sales from a builder are not considered valid comparable sales. If people are struggling to get valid appraisals, then they need to get better appraisers/lenders that understand the rules.
Also, the fact that the builder's buddy turned around and listed the property for $399,000 indicates that the value is there, and once that buddy actually sells it, it will then become a valid comparable sale. Kevin Heaphy, Real Estate Loan Office, Corporate America Family Credit Union, Elgin Ill.
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