Tax Code

For homeowners around the country who are seriously delinquent on their mortgages and hoping for relief, the IRS has bad news: If your lender agrees to modify your loan and forgive any part of your debt, you could owe federal income taxes on the amount forgiven. Think of it as the tax code's "kick-'em-while-they're-down" rule. When personal debts are canceled by a creditor, the amount forgiven is treated as ordinary income under the Internal Revenue Code unless the taxpayer is insolvent or bankrupt.

No reason to rush to special session Gov. Martin O'Malley has taken on the Herculean task of trying to raise $1.7 billion in revenue to balance the state budget. However, calling a special session will not serve the people of Maryland well ("Time to cut bait in Annapolis," Opinion * Commentary, Sept. 30). Such an important topic deserves time for input, discussion and debate. The citizens have a right to be heard and to have their views given fair consideration. This is not an emergency.

Tomorrow, as state lawmakers convene for a special session to address Maryland's fiscal woes, they will face the complex and controversial multibillion-dollar plan proposed by Gov. Martin O'Malley. In the days that follow, Mr. O'Malley's $2 billion budget-balancing blueprint - as well as a handful of related bills likely to be offered by legislators - will be scrutinized, debated and voted upon. In the end, their success can be measured by only one result: the adoption of a real and long-term solution to the state's growing structural deficit.

WASHINGTON -- A seasonal foreboding again settles on the republic. H&R Block, which prepares the income-tax forms of about one in seven taxpayers, is broadcasting television commercials featuring the ingeniously cryptic slogan, "We know. Do you?"Those four words capture the ominous mood of March in this country. In America, home of the free and the land of due process, most taxpayers find it impossible to know if they are complying with tax law.As a taxpayer wrote to the commissioner of Inland Revenue (as it then was)

WITH new tax breaks for children, college tuition and retirement accounts, taxpayers face more figuring than ever when it comes to filing taxes. How have the new breaks affected the annual tax season? How are these so-called targeted breaks likely to affect the economy? What are the consequences for tax reform?Stephen MooreDirector, fiscal policy studies, Cato Institute, WashingtonTaxpayers keep telling Congress they want a simpler tax system, but Congress has continued to add new deductions.

Have you heard the one about the state's new income tax code?The good news is you get a tax cut.The bad news is the short form has been eliminated and taxpayers will in effect have to calculate their taxes twice using two different sets of guidelines."

WITH the congressional season rapidly drawing to a close, thousands of American homeowners are in line to benefit financially from two little-noticed tax developments on Capitol Hill.One involves the surprise rebirth of a reform designed to provide tax relief for certain homeowners who sell their property at a loss. The other involves the retention in the tax code of one of the most generous provisions for owners of primary residences and vacation property -- a rare federal sanction to pocket ordinary income with zero taxation.

`Death tax' hurts middle class as it erodes core valuesI was surprised to read The Sun's editorial "Death tax's exaggerated bite" (Aug. 2). It cited a seriously flawed study by Charles Davenport and Jay A. Soled as justification for opposing the elimination of the federal estate or "death" tax.But that study relied chiefly on questionable tax and economic data supplied by the federal government -- information obtained from an administration that has opposed...

THE $792 billion tax-cut bill Congress passed before heading home for summer recess last week is:(a) Guaranteed a veto by Bill Clinton once it hits his desk next month.(b) Loaded with goodies for just about everybody except homeowners with special tax problems;(c) Likely to be followed by a second attempt at a 1999 tax-cut bill that could -- but may not be -- more helpful;(d) All of the above.The answer is (d), All of the above.The bill that passed the Senate by a single vote did manage to include a handful of items designed to solve homeowner difficulties with the federal tax code -- especially those of workers sent overseas by private or government agency employers.

BECAUSE income-tax payments are due today, many groups seeking reform of the federal tax code and the Internal Revenue Service stage events to promote their causes. They aren't finding much of an audience.The buoyant economy has taken much of the urgency out of the tax-cut issue. When people are making money, buying cars and homes and even saving a portion, they apparently don't mind when the government takes its cut.Other factors may be at work as well. With electronic filing, taxpayers are getting their refunds in record time, removing some of the animus.

Protests prompted by excess spending For once we have to congratulate Jay Hancock and The Baltimore Sun for presenting a very good analysis of the recent Tax Day demonstrations we were privileged to participate in last week in Annapolis ("Let's cut spending and raise taxes," April 18). The tea party crowd was made up, for the most part, of earnest citizens whose main complaint was not paying taxes but the profligate spending of our current and former government. Taking on new initiatives at a time of economic malaise is not wise and doesn't address the many issues left on the table now for years, including the inadequate funding for the Social Security and Medicare programs that grow more out of hand every year.

Compared with the precedent-setting government changes occurring in Washington, this year's Maryland General Assembly regular session in Annapolis was rather sleepy. Don't get me wrong: The state faces serious, structural deficit issues, and whatever funds the Obama administration provides are a useful but ultimately temporary solution. But when speed cameras and driving while texting emerge as two of the more controversial issues of the legislative the session, you wonder if Marylanders are somehow living in a bubble.

Tomorrow, as state lawmakers convene for a special session to address Maryland's fiscal woes, they will face the complex and controversial multibillion-dollar plan proposed by Gov. Martin O'Malley. In the days that follow, Mr. O'Malley's $2 billion budget-balancing blueprint - as well as a handful of related bills likely to be offered by legislators - will be scrutinized, debated and voted upon. In the end, their success can be measured by only one result: the adoption of a real and long-term solution to the state's growing structural deficit.

Gov. Martin O'Malley's plan for a special legislative session to address Maryland's projected $1.7 billion budget deficit suffered a major blow with the decision by Senate Republicans not to support a slots bill - at least not before the regular session next January. That's welcome news. As much as a special session offers the most expedient path for Mr. O'Malley's $2 billion deficit reduction package - and prolonging these decisions puts the state budget potentially $500 million deeper in the hole - it's still the wrong choice.

No reason to rush to special session Gov. Martin O'Malley has taken on the Herculean task of trying to raise $1.7 billion in revenue to balance the state budget. However, calling a special session will not serve the people of Maryland well ("Time to cut bait in Annapolis," Opinion * Commentary, Sept. 30). Such an important topic deserves time for input, discussion and debate. The citizens have a right to be heard and to have their views given fair consideration. This is not an emergency.

Reforms will make tax code more fair Kudos to state Sens. Lisa Gladden and Paul G. Pinsky for championing combined tax reporting in an effort to make Maryland's tax code more fair ("Make corporations pay fair share," Opinion Commentary, Aug. 30). No one should be able to game the system. Unfortunately, Maryland's current tax code allows multistate corporations to shift their profits out of state, leaving in-state businesses and individuals to foot the bill for transportation, education and public safety.

The fiscal sky is supposed to be falling on the state of Maryland. But to John Willis, it's a case of been there, done that, with no serious damage to the sky or the ground. The former secretary of state in the Parris N. Glendening administration says that the current fiscal crisis -- the so-called structural deficit that might require a special session of the General Assembly -- is nothing more than one of the many financial bumps on the road that the state always faces. "For the last 40 years, all Maryland governors have done what they had to do," says Willis, a historian of Maryland politics who teaches at the University of Baltimore.

For homeowners around the country who are seriously delinquent on their mortgages and hoping for relief, the IRS has bad news: If your lender agrees to modify your loan and forgive any part of your debt, you could owe federal income taxes on the amount forgiven. Think of it as the tax code's "kick-'em-while-they're-down" rule. When personal debts are canceled by a creditor, the amount forgiven is treated as ordinary income under the Internal Revenue Code unless the taxpayer is insolvent or bankrupt.

With gasoline prices back near the $3 mark, and the threat of air pollution, including excess carbon dioxide, more dire than ever, one would like to think the federal government would be steering commuters toward public transportation. But there is a long-standing quirk in the federal tax code that does exactly the opposite - that gives preference to people who drive over those who ride energy-efficient, lower-polluting buses or trains. Here's how it works: Employers can offer parking as a tax-free benefit of up to $215 per month per worker.

Editor's note: Every Tuesday through the end of tax season, The Sun will run an edited transcript of Baltimoresun .com's weekly tax advice column featuring three experts from the Hunt Valley accounting firm SC&H Group. A few years ago we bought a time share. We recently sold it, at a loss, to a company that buys up time shares and that said the loss could be written off. My reading of tax information and a call to the IRS indicate that a time share is personal use property and the loss cannot be taken on taxes.