I’ve been receiving many questions from my last post, so I am going to attempt to answer the most common questions. If you have others, please contact me directly.
Q: What exactly is this pension and who qualifies?
A: Here are the mandatory qualifications for what is known as the Veterans Improved Pension Benefit. This is a non-service connected pension benefit with additional add-ons of “housebound” and “aid and attendance” benefits available to a veteran or their widow(er) who requires the assistance of another person in order to avoid the hazards of his or her daily environment. This is not to be confused with a service related disability pension which falls under a different program. The veteran must also have:
a. 90 days of consecutive active duty service, one of which was during wartime.
b. Any discharge other then a dishonorable discharge
c. Be 100% disabled or at least age 65
d. There are income and asset limitations which can be discussed individually
Q: How do I know if I qualify?
A: Go to http://www.gbausa.org/pstraub and fill out the qualification form. It comes directly to me and no one else and I can contact you to discuss your qualification.
Q: I already applied and was turned down. What can I do now?
A: Once you have submitted the application, and if it was done incorrectly or lacking the proper documentation, it is pretty difficult to overturn the decision. This is why it is crucial to do everything right before the initial submittal.
Q: I have a Veteran’s Service Officer helping me. Do they perform the same service you are providing?
A: The Veteran’s Service Officer at the local VFW or American Legion is trained to fill out the paperwork for submittal. They are not trained or able to offer suggestions of what options you have to be in a position to qualify at a later date, and may tell you that you do not currently qualify and to come back once your income or assets have been depleted. It makes their job easier if everything is in order so they can review the application prior to submittal and make sure everything is in order for processing. Since you only get one first shot at success, it pays to have all your ducks in a row so you are approved on the first go around. Since neither myself nor the VA Service officer charge for this service, why not cover all your bases for optimum success? We both want you to qualify to receive the benefit you have earned.
Q: How long does it take to qualify and begin receiving the benefit?
A: The VA can take 4-6 months to approve the benefit, just due to backlog and understaffing. However, the benefit is retroactive to the 1st of the month following application receipt, so the sooner the better as far as applying. If assets need to be transferred, this may take additional time depending on the individual situation.
Q: Do you have to be “poor” to qualify?
A: No. To get only the basic pension without any need of medical assistance, such as driving, taking medication, walking, bathing, etc, you do have to have a very low income and this may not be the right time to apply. Once you start needing ongoing care, the medical bills can be substantial, and this is when the program can really help defray the costs of home care, assisted living, or nursing care. This is the true value of this benefit.
Q: Is this applicable to the spouse of a veteran?
A: Although the aid and attendance benefit is for the veteran or the widow(er) of the veteran, it still may assist the couple when either needs care. This is because both the husband and wife’s income counts towards qualification, so do the medical costs of both the husband and wife count towards qualification.
Q: If a widow(er) of a veteran remarries, do they still qualify for the benefit?
A: No. The VA only counts the most recent marriage for the widow(er).
Q: Does care provided in the home count for qualification?
A: Yes, see me for details.
Q: What if a child is caring for the veteran at home?
A: The care does not have to be provided by a licensed care giver as in long term care policies. See me for details.
Q: Can a veteran get both a service related pension benefit and a non-service related benefit?
A: Not both at the same time. Whichever pays the higher amount would be the one to go with.
Q: Does this amount stay the same year after year?
A: The amounts are increased annually. You must also re-qualify each year, which is pretty straight forward unless you receive additional income or no longer need assistance.
The bottom line is if you know of someone who may qualify, it is worth it to check it out. With the rising cost of health care, the increase in life expectancy and the risk of outliving income and savings, every penny counts and this benefit is free of dreaded TAXES!
Paula Straub
www.savegainstax.com
http://gbausa.org/pstraub
888-338-3036 toll free
savegainstax@gmail.com
Monday, April 13, 2009
Tuesday, April 07, 2009
Important Info for Veterans Over 65 Using Assisted Living Services
In doing research for my own family member, I came across extremely valuable information for US Veterans that might make a huge financial difference in their lives and the lives of their spouses and children.
If you are, or know of, a Veteran or Widow(er) of a Veteran over age 65 in need of medical assistance for daily living, whether at home, in an Assisted Living Facility or in a Nursing Facility, you need to know if you (or they) qualify for the Veterans NSC Improved Pension Benefit.
http://www.gbausa.org/pstraub
This assistance is a little known benefit of tax free pension income from our Government to Veterans who served during any period of war, even if they did not go into battle and it can truly be a life saver.
I recently went through a training program to educate people on this benefit and have set up a web page with additional information and resources. I also have a toll free phone line for questions and contact.
http://www.gbausa.org/pstraub
It doesn’t matter which state you reside in. I will let you know if I can help, or I will try and direct you to a person in your area.
There is no charge for this service and I urge you to use it. Even if you think you or your family member or friend will not qualify, this may not be the case. The maximum benefit for 2009 is $23,396.00 per year and is TAX Free!
Go to this web link and find out more.
http://www.gbausa.org/pstraub
Paula Straub
http://www.savegainstax.com/
760-917-0858
If you are, or know of, a Veteran or Widow(er) of a Veteran over age 65 in need of medical assistance for daily living, whether at home, in an Assisted Living Facility or in a Nursing Facility, you need to know if you (or they) qualify for the Veterans NSC Improved Pension Benefit.
http://www.gbausa.org/pstraub
This assistance is a little known benefit of tax free pension income from our Government to Veterans who served during any period of war, even if they did not go into battle and it can truly be a life saver.
I recently went through a training program to educate people on this benefit and have set up a web page with additional information and resources. I also have a toll free phone line for questions and contact.
http://www.gbausa.org/pstraub
It doesn’t matter which state you reside in. I will let you know if I can help, or I will try and direct you to a person in your area.
There is no charge for this service and I urge you to use it. Even if you think you or your family member or friend will not qualify, this may not be the case. The maximum benefit for 2009 is $23,396.00 per year and is TAX Free!
Go to this web link and find out more.
http://www.gbausa.org/pstraub
Paula Straub
http://www.savegainstax.com/
760-917-0858
Tuesday, March 31, 2009
Good Intentions, Bad Tax Consequences
As we step in to take care of aging friends, parents and grandparents, we can make choices which seem like a good idea at the time, but turn out to be not so desirable when it comes time to sell.
I’ve gotten several questions lately about the tax consequences after selling a home that was either gifted or sold for a very low price prior to death, typically to a child of a sick or ailing relative.
The idea was that the owner was either too sick or unable to take care of their residence and a child stepped into getting control of the assets so they could make the financial decisions to care for the seller.
Since they didn’t want to pay the seller out of pocket, the property was gifted with a quit claim or grant deed or sold on paper for $1. or other low amount. No taxes were due, and now the responsible party was in control. Note: this doesn’t work for planning for state or federal aid unless done at least 5 years prior to need or request.
Then, once the parent or seller is taken care of or has passed on the property is sold for market value. It is at this time that the real consequences surface.
To make a long story short, the new seller now has a large tax bill with capital gains tax levied on the amount over cost basis for the sale. The cost basis is either the $1 paid or the previous owner’s cost basis if gifted. This can be a huge amount depending on value.
If the original owner had retained title, the house could have been sold and the personal exclusion for primary residence applied if they still satisfied the ownership and residence tests, or would have passed to the beneficiary at market value as of date of death.
The child could have gotten legal power of attorney and handled this for the original owner if incapacitated.
Before making any major decisions, be sure to meet with a good attorney who will explain all the pros and cons.
Paula Straub
www.savegainstax.com
savegainstax@gmail.com
760-917-0858
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to
http://www.savegainstax.com/qq.html
I’ve gotten several questions lately about the tax consequences after selling a home that was either gifted or sold for a very low price prior to death, typically to a child of a sick or ailing relative.
The idea was that the owner was either too sick or unable to take care of their residence and a child stepped into getting control of the assets so they could make the financial decisions to care for the seller.
Since they didn’t want to pay the seller out of pocket, the property was gifted with a quit claim or grant deed or sold on paper for $1. or other low amount. No taxes were due, and now the responsible party was in control. Note: this doesn’t work for planning for state or federal aid unless done at least 5 years prior to need or request.
Then, once the parent or seller is taken care of or has passed on the property is sold for market value. It is at this time that the real consequences surface.
To make a long story short, the new seller now has a large tax bill with capital gains tax levied on the amount over cost basis for the sale. The cost basis is either the $1 paid or the previous owner’s cost basis if gifted. This can be a huge amount depending on value.
If the original owner had retained title, the house could have been sold and the personal exclusion for primary residence applied if they still satisfied the ownership and residence tests, or would have passed to the beneficiary at market value as of date of death.
The child could have gotten legal power of attorney and handled this for the original owner if incapacitated.
Before making any major decisions, be sure to meet with a good attorney who will explain all the pros and cons.
Paula Straub
www.savegainstax.com
savegainstax@gmail.com
760-917-0858
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to
http://www.savegainstax.com/qq.html
Tuesday, March 24, 2009
Simply Wealth On Hiatus
I’ve really enjoyed being the host of Simply Wealth on WebTalkRadio over the past 15 months, and wanted to let you know I’m taking a break to concentrate on exciting new ventures.
Anyone who has hosted a weekly radio show will appreciate the amount of time and effort that goes into preparing, taping, editing, uploading, etc. I developed a regular following of about 30K listeners on a weekly basis and appreciate all who faithfully tuned in.
I will keep my radio email open for any general questions on financial matters and try to keep up with replying as time allows. This address is SimplyWealthShow@gmail.com . You can also listen to my archived shows at www.savegains.com by clicking on the link to “Listen to My Radio Show Simply Wealth”.
You can also follow me on Twitter. My name there is @savegainstax . This is a whole new concept for me which allows short updates of new developments and interesting tidbits.
While waiting for the credit markets to unfreeze, stay tuned for info on some local seminars I will be offering which will really benefit certain deserving individuals. More info to follow.
Paula Straub
www.savegainstax.com
savegainstax@gmail.com
760-917-0858
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to
http://www.savegainstax.com/qq.html
Anyone who has hosted a weekly radio show will appreciate the amount of time and effort that goes into preparing, taping, editing, uploading, etc. I developed a regular following of about 30K listeners on a weekly basis and appreciate all who faithfully tuned in.
I will keep my radio email open for any general questions on financial matters and try to keep up with replying as time allows. This address is SimplyWealthShow@gmail.com . You can also listen to my archived shows at www.savegains.com by clicking on the link to “Listen to My Radio Show Simply Wealth”.
You can also follow me on Twitter. My name there is @savegainstax . This is a whole new concept for me which allows short updates of new developments and interesting tidbits.
While waiting for the credit markets to unfreeze, stay tuned for info on some local seminars I will be offering which will really benefit certain deserving individuals. More info to follow.
Paula Straub
www.savegainstax.com
savegainstax@gmail.com
760-917-0858
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to
http://www.savegainstax.com/qq.html
Wednesday, March 18, 2009
Safety Has Once Again Risen To the Forefront- Thank Goodness!
It was less than a year ago that clients were willing to forsake safety and a steady return for the chance to “make it big” with gas and oil, REITs, real estate and other volatile investments.
They decided to pay all their capital gains tax and depreciation recapture up front so they could invest their hard earned proceeds – often with the help of money managers- to not only get back where they started from before taxes, but to soar ahead of a measly 6% return and tax deferral.
Why put money into principle protected products that don’t lose in bad markets and gain only a portion of the growth that stock indexes make in good times? How boring!
Do you know anyone who has lost a LOT of money in the market this year, in gas and oil, in real estate, in a business? I do. I have taken a beating in my own retirement plans.
The people I know who are the happiest are the ones that opted for the boring equity indexed annuity and who have experienced zero loss and an income stream that pays the monthly expenses. When the market does come back, and it will eventually, they will start where they left off and not have to dig out of any holes going forward.
It takes a crisis like the one we are in to appreciate slow and steady versus quick and uncertain. Now when I get calls, the first thing I’m asked is how will they be assured their principle is protected?
If I look back to my parent’s generation, who worked and saved rather than borrowed and spent, we have come full circle. I think it’s a much better way to go.
How about you?
Paula Straub
http://www.savegainstax.com/
savegainstax@gmail.com
760-917-0858
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to
http://www.savegainstax.com/qq.html
They decided to pay all their capital gains tax and depreciation recapture up front so they could invest their hard earned proceeds – often with the help of money managers- to not only get back where they started from before taxes, but to soar ahead of a measly 6% return and tax deferral.
Why put money into principle protected products that don’t lose in bad markets and gain only a portion of the growth that stock indexes make in good times? How boring!
Do you know anyone who has lost a LOT of money in the market this year, in gas and oil, in real estate, in a business? I do. I have taken a beating in my own retirement plans.
The people I know who are the happiest are the ones that opted for the boring equity indexed annuity and who have experienced zero loss and an income stream that pays the monthly expenses. When the market does come back, and it will eventually, they will start where they left off and not have to dig out of any holes going forward.
It takes a crisis like the one we are in to appreciate slow and steady versus quick and uncertain. Now when I get calls, the first thing I’m asked is how will they be assured their principle is protected?
If I look back to my parent’s generation, who worked and saved rather than borrowed and spent, we have come full circle. I think it’s a much better way to go.
How about you?
Paula Straub
http://www.savegainstax.com/
savegainstax@gmail.com
760-917-0858
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to
http://www.savegainstax.com/qq.html
Thursday, March 12, 2009
A Sad, But All Too Common Story
In past years, the most common situation was people nearing retirement often came to a decision to sell real estate or businesses which had appreciated in value, had a low cost basis and little debt. This left a big gain and a huge tax bill.
There are still many great choices for deferring or spreading out taxes over long periods of time and setting up a solid income stream for retirement if this is the case.
With this crazy economy, more and more upside down situations are becoming all too common place. Here is one scenario which has many variations, but the same dire consequences.
Phil bought a commercial property 16 years ago for 500K. As it appreciated in value, he took out equity to make other investments, pay bills and buy a few luxuries. His debt increased to 800 as the property value reached 1 million.
Then the market came tumbling down and the property is now worth 750K and he wants to sell. He will only clear about 700K after normal costs of sale. He called to ask how he can minimize his taxes.
Phil is in a world of hurt with no good way out. Not only would he have to come up with 100K out of pocket to pay off the loan to the lender, he is on the hook to the IRS for 400K in capital gains and depreciation recapture, which will work out to about 120K in taxes due.
So, to sell now, he will owe approximately 220K out of pocket to the bank and the IRS and he will have zero proceeds from the sale. Phil was hoping I would have a solution for him to defer paying his taxes. Bankruptcy came to mind.
The thing Phil was oblivious to was that he had had use of 300K equity for many years, but had not reinvested it into his property, and spent it elsewhere. He had assumed the property value would continue to increase and never go down. Now he’s pretty much up a creek without a paddle.
Since Phil does not have the money he needs, he may not be able to sell at current market value. The lender would have to ok a short sale, and then he would have to declare the 100K as income because it is forgiveness of debt and there is no break for investment property. He would still owe the 120K to the IRS. There is no way he can pay all his tax and mortgage obligations, as he has no savings.
The bottom line is, Phil is in trouble and if he can’t hold onto the property he will have to look into bankruptcy or insolvency. There are currently many in the same boat and there is no good way out. I hope Phil can hang on until the market rebounds at least enough to cover his taxes because I hate to see anyone lose everything they’ve worked for.
Paula Straub
www.savegainstax.com
savegainstax@gmail.com
760-917-0858
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to
http://www.savegainstax.com/qq.html
Listen to my weekly radio show “Simply Wealth” at www.webtalkradio.net
There are still many great choices for deferring or spreading out taxes over long periods of time and setting up a solid income stream for retirement if this is the case.
With this crazy economy, more and more upside down situations are becoming all too common place. Here is one scenario which has many variations, but the same dire consequences.
Phil bought a commercial property 16 years ago for 500K. As it appreciated in value, he took out equity to make other investments, pay bills and buy a few luxuries. His debt increased to 800 as the property value reached 1 million.
Then the market came tumbling down and the property is now worth 750K and he wants to sell. He will only clear about 700K after normal costs of sale. He called to ask how he can minimize his taxes.
Phil is in a world of hurt with no good way out. Not only would he have to come up with 100K out of pocket to pay off the loan to the lender, he is on the hook to the IRS for 400K in capital gains and depreciation recapture, which will work out to about 120K in taxes due.
So, to sell now, he will owe approximately 220K out of pocket to the bank and the IRS and he will have zero proceeds from the sale. Phil was hoping I would have a solution for him to defer paying his taxes. Bankruptcy came to mind.
The thing Phil was oblivious to was that he had had use of 300K equity for many years, but had not reinvested it into his property, and spent it elsewhere. He had assumed the property value would continue to increase and never go down. Now he’s pretty much up a creek without a paddle.
Since Phil does not have the money he needs, he may not be able to sell at current market value. The lender would have to ok a short sale, and then he would have to declare the 100K as income because it is forgiveness of debt and there is no break for investment property. He would still owe the 120K to the IRS. There is no way he can pay all his tax and mortgage obligations, as he has no savings.
The bottom line is, Phil is in trouble and if he can’t hold onto the property he will have to look into bankruptcy or insolvency. There are currently many in the same boat and there is no good way out. I hope Phil can hang on until the market rebounds at least enough to cover his taxes because I hate to see anyone lose everything they’ve worked for.
Paula Straub
www.savegainstax.com
savegainstax@gmail.com
760-917-0858
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to
http://www.savegainstax.com/qq.html
Listen to my weekly radio show “Simply Wealth” at www.webtalkradio.net
Tuesday, March 03, 2009
How Bill Saved $240,981 Using a Self Directed Installment Sale
Bill owned an investment property that had appreciated a lot in value. He had depreciated it completely over the years.
Bill’s adjusted cost basis was $0. His straight line depreciation was 200K. The selling price after closing costs was 1.2 million. His gain is 1.2 million and of that 200K is taxed at depreciation recapture rates, and 1 million is taxed as capital gain.
Bill is 62 years old and lives in Utah where capital gains are taxed at 5%.
Bill did not want to do a 1031 exchange and wanted the maximum amount of proceeds to be kept in his family. A Self Directed Installment Sale was his vehicle of choice.
If Bill had sold and paid all taxes upfront, he would have owed about 264K in taxes.
By structuring the sale correctly, Bill chose a 25 year payout so it would most likely last him the rest of his life. He is single and has one son who is financially sound.
By spreading out the repayment of capital gains and depreciation recapture over 25 years, Bill was able to recognize a savings of approximately 241K .
Assuming Bill paid his taxes, invested the proceeds at 6% interest and took withdrawals to live on over a 25 year period, his annual income would be approximately $73,056.00 per year.
By deferring and spreading out the tax repayment over 25 years and assuming that the proceeds are also invested at 6% during the payout phase, his annual income is $93,661.00 per year.
In these crazy times, can you use the extra income, or do you prefer to give it to the IRS?
Paula Straub
www.savegainstax.com
savegainstax@gmail.com
760-917-0858
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to
http://www.savegainstax.com/qq.html
Listen to my weekly radio show “Simply Wealth” at www.webtalkradio.net
Bill’s adjusted cost basis was $0. His straight line depreciation was 200K. The selling price after closing costs was 1.2 million. His gain is 1.2 million and of that 200K is taxed at depreciation recapture rates, and 1 million is taxed as capital gain.
Bill is 62 years old and lives in Utah where capital gains are taxed at 5%.
Bill did not want to do a 1031 exchange and wanted the maximum amount of proceeds to be kept in his family. A Self Directed Installment Sale was his vehicle of choice.
If Bill had sold and paid all taxes upfront, he would have owed about 264K in taxes.
By structuring the sale correctly, Bill chose a 25 year payout so it would most likely last him the rest of his life. He is single and has one son who is financially sound.
By spreading out the repayment of capital gains and depreciation recapture over 25 years, Bill was able to recognize a savings of approximately 241K .
Assuming Bill paid his taxes, invested the proceeds at 6% interest and took withdrawals to live on over a 25 year period, his annual income would be approximately $73,056.00 per year.
By deferring and spreading out the tax repayment over 25 years and assuming that the proceeds are also invested at 6% during the payout phase, his annual income is $93,661.00 per year.
In these crazy times, can you use the extra income, or do you prefer to give it to the IRS?
Paula Straub
www.savegainstax.com
savegainstax@gmail.com
760-917-0858
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to
http://www.savegainstax.com/qq.html
Listen to my weekly radio show “Simply Wealth” at www.webtalkradio.net
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