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Archive for February, 2014

We began our tax return

February 10th, 2014 at 07:46 pm

As many of you may remember, we sold a house as a short sale in April 2013.

The house we sold was not our principal residence, we did not declare bankruptcy in 2013, and we were not insolvent at the time of the sale...therefore, we should be required to pay tax on the amount of debt cancelled.

We did not receive a 1099-C from our mortgage holder. As I understand it, they were required to mail the 1099 on or before Jan. 31. We waited 7 "mail days" (days we received mail) for the 1099 before we bought Turbo Tax. The reason that's important is that if we had received the 1099-C, we probably would have hired a CPA to complete our return, and not bought TT.

I bought TT yesterday. We don't plan to inform the IRS about our forgiven debt.

I have no clue why our mortgage holder wouldn't report our forgiven debt to the IRS. It seems to me that if they wanted to declare the loss for their own taxes, they would have had to issue is a 1099, right? But, we didn't get a 1099, and I think we waited long enough, didn't we? We waited until February 9.

I seriously do not want to volunteer to the IRS that we owe them about 20K in taxes. But, if the 1099 had shown up, we would have figured it out (as I've mentioned before regarding this issue, most of it would have been covered by the adoption credit from our 2012 adoption of a special needs child).

So, we're going to complete our taxes as is, without declaring the cancelled debt.

Any thoughts on this would be appreciated.

Thanks.

We Bought iPhones

February 7th, 2014 at 07:46 pm

One for me, one for DW, and one for DD1 to share with DD2. We'll see how the "sharing" goes.

DW and I each bought an iPhone 5S for $149 each, and DD1(2)got an iPhone 4, free with the two year contract.

DD1(2) have had a flip phone for a year or so, mainly so we can keep in touch. It cost $10 per month to put her on the plan. We weren't sure we wanted her (them) to have an iPhone, but we decided that in this day and age, being tech savvy is part of her (their) learning. So, we'll monitor the use.

DW and I had previously had Android phones. The one I got two years ago was free with my contract. It was was getting to the point that if I wanted to download an app, I had to choose one to delete. Not enough storage space. The phone part of DW's Droid was becoming unreliable.

So, we bit the bullet, and switched to Apple.

Our 5yo has a tendency to throw electronic gadgets in pools, toilets, and bath tubs. So, we bought the insurance for each of the phones ($99 ea.), and we'll order the water-resistant covers for each (about $60).

I fully realize that these were luxury purchases, and not necessarily a great financial move. But, I was tired of limping along with an outdated phone, and I wanted to purchase something that will last well beyond the two-year contract.

So far I love it. We received an iPad as a Christmas gift last year, so I'm already familiar with the platform.

Watch, Apple will announce the iPhone 6 in three weeks.

FFA Leadership Contests - tonight

February 4th, 2014 at 04:10 pm

DW and I will be judging FFA leadership contests tonight. If you don't know what FFA is - it used to be called Future Farmers of America - now just FFA. It's an opportunity for kids grades 7-12 to learn agri-science, and leadership skills like public speaking, job interview skills, etc.

Tonight we're judging at the district level. The hierarchy of levels is District -> Regional -> State -> National. We'll also be judging different contests at he state level in March. Two representatives from each level go on to the next level, so we have to declare two winners, and award each contestant "Gold" "Silver" or "Bronze" almost everyone gets at least a gold or silver.

DD1 will be in 7th grade next year, and eligible for FFA. How does that fit in with home-school? We'll (mostly DW with my help) need to develop a curriculum for her, and drive her to chapter meetings. DW and I have three Ag. degrees between us, so I think we can handle curriculum development.

What does this have to do with finances, you ask? DW was very active in FFA through high school and even college. Her involvement in FFA leadership activities was a big part of how she was awarded a full-ride scholarship to MSU from the College of Agriculture and Natural Resources Alumni Association. She was required to maintain a 3.5 GPA at MSU to keep the scholarship, which she did.

I'm not saying that my children's involvement in FFA will result in a full-ride scholarship, but it sure won't hurt.

When I was in school, the FFA chapter had disbanded, so I didn't have the opportunity to be involved. The local chapter started up again a couple years ago, and hopefully it remains strong, and our children can take full advantage of the opportunities in FFA. And, if a scholarship or two comes their way as a result, that would be just fine.

February Net Worth

February 3rd, 2014 at 06:06 pm

I wish I had remembered to do this last month, so I could have beginning of the year numbers. Oh well.

Assets

Checking - 1,366
EF - 3,500
Pick up - 8,800
Van - 850
Lawn Mower - 1,700
Home (7/12 appraisal) - 77,000
Retirement Fund - 142,977

Total Assets - 236,193

Liabilities

Amazon CC - 175
Pick up - 6,975
Mortgage - 50,676

Total Liabilities - 57,826

Net Worth - 178,367

We took money out of our EF to cover repairs on family van. Once we get the insurance money back, we can replenish the EF back to 6K.

Retirement fund took an approximate 2.5K hit from the beginning of last month.

The Amazon will not begin to accrue interest until June.

I would guess that the house would appraise for more than that now, but a number any different than that would be a pure guess.

We'll get a 1.9K check from the state of Michigan this week - adoption subsidy. I also need to turn in reimbursement at work - not sure how much. Probably between $500 and $600. Other than that, we have no more cash coming in this month.

We also need to pay property taxes - about $400.

All in all, happy with current net worth.