Q: My mother died in November 2009, and I inherited her house. The house was put in my name, and I was able to sell it in early 2010. Because of market conditions, the sale price ended up below value and I had to pay about $8,500 in closing fees. Would these fees be considered as a capital loss for tax purposes? — C.S., DeBary
A: In your case, if the fair market value of the home at your mother's passing was $100,000, and you were able to sell it for $90,000 less $8,500 in closing costs, you would have a long-term capital loss (regardless of how long you held the property) of $18,500. The fair market value is determined on the date your mother passed away, or the alternate valuation date, if used, not her purchase cost. Additionally, the overall answer would be different if you had rented out, used the property for business before the sale or if you inherited the property in 2010. — Scott E. Cadwell
Q: Will company-paid health insurance benefits be treated as taxable income in 2011? Will there be a maximum benefit that will not be taxable? — M.K.B., Oviedo
A: The requirement to report health insurance benefits on the W2 is for information purposes only, comparable to reporting non-taxable 401(k) or 403(b) contributions. Tax law has never required that these benefits be included in income, and that has not been amended by the new Health Care Reform Act. — Winston Mollena
Q: I'll soon be retiring and am looking at rolling my 401(k) to an IRA. Should I consider one of the guaranteed-income contracts that I've seen advertised? — M.H., Longwood
A: Many people in retirement or near retirement who desire some exposure to stocks for the growth potential but are concerned about market volatility and it's effect on income, have found these products with the lifetime income guarantee a good fit. You review all of your options with an advisor to determine if your 401(k) funds, or a portion of it, should go into such a contract. Things to consider among others, would be your other assets and sources of income, family status, longevity expectations and risk tolerance. — Randy Harrison
Have a question? E-mail us at firstname.lastname@example.org. Include your name (only your initials will be printed), hometown and phone. Questions are answered by Certified Financial Planners from the Central Florida Chapter of the Financial Planning Association. Answers are for educational purposes only. Please consult your financial professional. Questions and answers may be edited for space considerations.
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