Shared equity is tax law’s officially designed rent-to-own your home program. For this to work, it takes two parties: (1) a landlord-investor and (2) a tenant-investor. The landlord-investor benefits because he has no vacancies, few hassles, no management fees, and a known cash flow. The tenant-investor benefits because he gets into this home with little or no down payment, builds equity while paying rent, and gets detailed knowledge about the property while living there. At some agreed future point in time, the landlord-investor sells his or her interest in the property to the tenant-investor or the two of them sell the property to a third party.

The taxpayer’s tax preparer told him to create an “Affidavit of Facts” to support his tax deductions. This was a useless exercise. This tax preparer, the one who recommended the useless affidavit, lost his enrolled agent status, and the time of this trial was forbidden by the United States government to prepare tax returns.

Interest paid on a life insurance loan to buy a home does not count as deductible mortgage interest.

Personal use of your bed and breakfast includes use by your tax-law defined relatives, including those relatives who pay fair rent.

At death, IRAs are not treated like homes, which pass to the heirs at fair market value with no income tax issues. Instead, the IRA faces both the estate tax and the income tax. In this court case, the combined estate and income taxes devoured $1.6 million and the heirs had $1.1 million left to spend.

The 15.3 percent self-employment tax is not really 15.3 percent because the tax calculation includes only 92.35 percent of self-employment income. Thus, the true self-employment tax rate works out to 14.13 percent.

To deduct mortgage interest, (1) you must have title, (2) the mortgage must be in your name, (3) the home must secure the mortgage, and (4) you must make the mortgage payments from your money.

When you take early retirement and your income is greater than the thresholds, your Social Security benefits are subject to (1) recapture by the Social Security Administration and (2) taxation by the IRS. Tax planning to avoid both benefit recapture and taxation of benefits involves the possible use of an S or C corporation.