The concept of cancellation of debt (sometimes referred to as discharge of indebtedness) as income that must be reported on your tax return is, to me, not at all intuitive. A TaxProf Blog post that discusses reported cases on the subject illustrates some of the ins and outs of the concept, and when cancellation of debt is, or is not, reportable as income on your federal income tax return.
THIS MONTH'S REAL ESTATE LAW UPDATE IS ABOUT THE RULES OF THE ROAD FOR YOUR HOMEOWNERS' ASSOCIATION'S DESIGN REVIEW COMMITTEE
A faithful reader, appraiser Steve Cole, suggested that in my next Update on the subject of homeowners' associations, I should discuss the ins and outs of architectural review, also known as design review. If you have ever lived in a neighborhood governed by, or otherwise had to deal with, a homeowners' association, you have probably heard about the architectural review committee. The architectural review committee is the arm of the homeowners' association that is charged with making decisions implementing the association's aesthetic guidelines. In other words, they get to decide whether or not your house addition, patio wall, or new landscaping will be approved under the association's rules.
Read all about it in my latest Real Estate Law Update, posted in the publications section of deconcinimcdonald.com.
WHY IS THE SECTION OF THE IRS WEBSITE ABOUT ESTATE AND GIFT TAXES UNDER THE HEADING “SMALL BUSINESS AND SELF-EMPLOYED?”
Businesses don’t pay estate and gift taxes, nor do they file estate tax or gift tax returns. Individuals pay estate and gift taxes and file estate tax returns (Form 706) and gift tax returns (Form 709). So why is the section of the IRS website about estate and gift taxes under the heading “Small Business and Self-Employed,” where no one who knows those basic facts is going to think to look? Is it because the IRS thinks that most taxpayers have the (mistaken) impression that only business owners need to be concerned about estate and gift taxes?
Most government agency web sites are poorly designed, but this is a particularly egregious example.
I guess there has been some criticism of the law that allows the State Department to deny your passport application if you have an unpaid federal tax liability of more than $51,000. I could be wrong, but I don’t think it’s a violation of anyone’s constitutional rights. I don’t think you have a constitutional right to a passport. It seems to me that Congress can put limitations on who gets a passport, and that’s what happened here. IF you think it’s objectionable, persuade Congress to change the law.
Via TaxProf Blog.
A story I just read is similar to the one I posted about recently involving land in Tempe, in that this story, like the Tempe case, involves an individual claiming that he was the true owner of a parcel of land because his ancestors had occupied it. This guy, unlike the guy in Tempe, at least apparently had some ancient documents that he thought backed up his claim, although it sounds like they really didn’t. The difference here is that this guy wasn’t the occupant of the property. He essentially showed up out of nowhere and claimed that the land in question was his, a claim which was disputed by the occupants. So in this case the claimant was not the occupant, but was claiming title based on documents, whereas in the Tempe case the claimant was the occupant, but had no documents.
The claimant in this case lost just like the claimant in the Tempe case, based on the same legal principle: adverse possession. The occupants in this case were able to successfully defeat the competing claim to the property by asserting adverse possession. In the Tempe case, the claimant’s attempt to assert ownership of the property under the doctrine of adverse possession was unsuccessful because the owner was the state. If title to that property had been held by a private owner, the claim of adverse possession probably would have worked.
Today there is yet another installment in the story about the individual who claims he is the rightful owner of a piece of land by the Salt River in Tempe. He claims that his family has occupied the land since territorial days. I have no idea if that claim is true or not. I will, however, take as true this statement in the story that appeared on azcentral.com today: the individual making the claim “could provide no records of ownership.” I’m also going to assume the truth of this statement in that story: the land was “given by the federal government to the territory of Arizona in 1863, ordered to be held in trust and auctioned off to provide money for public education.” In other words, it is state trust land. Finally, I’m going to take as a fact the statement that the city of Tempe bought half of the property in what sounds like it was a 3-way deal among the state, the city, and the railroad.
Without knowing anything else about it, I think I can pretty confidently say that with those facts, the case is over, and the individual loses. Why? Because (1) he can’t prove that he ever had title, and (2) the doctrine of adverse possession doesn’t operate against the state or a city (which is a political subdivision of the state).
The newspaper reporter tries to paint a sympathetic portrait of the individual who is claiming the land. For all I know, maybe the individual deserves sympathy. Legally, however, I’m pretty sure that he is wrong, and the courts have reached the correct result.
If you’re interested (which might require that you be a student of real estate law, as I am), you can read more about the subject of adverse possession in two newsletters in my archive, one from April, 2003, and the other from July, 2005.
This comment by Coyote could apply in lots of situations, but it made me think specifically of the bond issue that was required to fix Tucson’s streets when their condition got too bad to ignore any longer:
Deferred maintenance is the way that agency's [sic] can borrow without transparency and without any outside authorization to do things like maintain staff in the face of cutbacks. In effect, the agency is borrowing against the infrastructure the public has built to help fund staffing levels and benefits. What is deferred maintenance? It is all kind of things. It is having one out of three toilets in a bathroom break and just roping it off rather than fixing it. It is allowing potholes to multiply in the road without repair. It is constantly chasing more and more leaks in an underground water line and not just replacing it. It is an acknowledgement that all manmade things have a fixed life. Take picnic tables. Let's say a type of picnic table in a campground, of which there might be hundreds, lasts about 10 years. That means a responsible person should budget to replace 10% every year. But what if we skip a year? No one will probably notice if some old tables slide from 10 to 11 years old, and we save some money. But really we are only borrowing that money, because we will need to do twice as many next year. But then we do it again the next year, to borrow more, and the bill just increases for the future. Before you know it, the NPS has $12 billion in deferred maintenance, a $12 billion debt for which there is little transparency and no legislative approval -- and the interest on which all of us in the public pay when we have to live with these deteriorating public facilities.
I don’t remember who it was, but a commentator who writes about First Amendment cases, noting the frequency with which government agencies (whether well-intentioned or not) attempt to restrict free speech, said something like: what part of “make no law … abridging the freedom of speech” don’t they (those attempting to restrict free speech) understand?
I have said it before: the government cannot restrict speech based on its content. That means if a t-shirt maker doesn’t want to make a t-shirt with your slogan on it, the government can’t force him to, or penalize him if he refuses, no matter what your slogan is.
It’s the Nazi parade scenario in reverse: no matter how beneficial you think your message is, the government can’t force the t-shirt maker to say it, and no matter how detrimental you think someone else’s message is, the government can’t force the t-shirt maker to not say it.
Apparently I’m not the only one who has noticed, and Tucson is not the only place, that Mattress Firm has far more stores than seems normal. How could they possibly have the sales volume to justify all that overhead? Maybe the markup on mattresses is high, but I doubt it’s that high.
Apparently, a “steady-state economy” is an “alternative” economic model that involves “degrowth” (link goes to a PDF file- the terminology to which I am referring is on page 5). Sounds fishy. I think I’ll pass.
The contents of this blog, this web site, and any writings by me that are linked here, are all my personal commentary. None of it is intended to be legal advice for your situation.