BED BUGS ARE BACK

There is little doubt that bed bugs are making a strong comeback. With this in mind I've taken a proactive approach to avoid the problem by educating my tenants before the flea market and yard sale season begins. I'm crossing my finger that an ounce of prevention in this set of circumstance will go along way. The following is the letter sent:


Dear Tenant,

Bed bugs are making a come back. Once thought to be eradicated from North America, the legendary little pests known as bed bugs have been making an unwelcome comeback in hotels and homes. Recently reports of bed bugs problems have already been reported throughout Salem and the North Shore. Because bed bugs are very efficient hitchhikers, infestations can easily occur and spread quickly. Typically, bed bugs are quite comfortable stowing away in luggage, clothing, beds, mattresses, furniture and other household items. To prevent the infestation of bedbugs it is important to inspect all goods before bring them into your home. Be especially mindfull of items you may pick up at yard sales and second hand stores. Moreover, since people tend to discard onto the curb infested property, often times furniture items left outside for rubbish removal is the greatest source of bedbugs.

The best way to avoid the problem of bed bugs is by a thorough inspection of property. Bed bugs are large enough to see by eye. They can live in almost any crevice or protected location. They tend to congregate in mass but it is not uncommon to find a single bug or eggs scattered here and there.

Enclosed is a phamplet entitled “Your Guide to Bed Bugs” published by Pest Control Technology media group. Please take the time to read this comprehensive brochure not only does it provide with useful information about understanding bed bugs but the illustrations are especially helpful in identifying bed bugs.

Home Office as a Deduction

The home office deduction is a confusing topic for many taxpayers. Can I only take it if I am self-employed? What if you’re not self-employed, but work at home frequently? And isn’t it true that the IRS is more likely to audit you if you take the deduction?
Because of these types of concerns and questions, many taxpayers that are entitled to this deduction do not take it.
The home office deduction may be taken by anybody who uses their home, or part of their home, for business purposes. The IRS does have strict regulations that must be met to qualify for the deduction.

Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly–
As your principal place of business. As a place to meet or deal with patients, clients, or customers in the normal course of your business. In any connection with your trade or business where the business portion of your home is a separate structure not attached to your home. "Exclusive” is a key term in determining if you qualify for the deduction. By exclusive, the IRS means that the part of your home you are deducting is used only for business. Because of the above two restrictions, it is usually much easier for self-employed workers to take the home office deduction, assuming they have properly set up an area of the house which would qualify. However, if you are an employee who works at home, there is also a chance that you may qualify. In order to qualify, you must meet the “convenience-of-employer” test. This essentially means that the work you do at home must be at the request or convenience of your employer. If this is the case, you may qualify for the deduction assuming all of the other rules regarding exclusivity and regularity are followed. There are two types of deductible expenses relating to the use of a portion of your home as a home office—direct and indirect expenses.

1. Direct expenses relate to the actual work space. This includes repairs and paint inside your home office.

2. Indirect expenses relate to the house that the office is inside and are only partially deductible. Utilities, insurance, and mortgage interest are examples of indirect expenses. These expenses are only deductible based on the square footage of your home office to your total home. For example, if your office is 20% the square footage of your entire house, you can deduct up to 20% of your indirect expense as a home office deduction.

Now some people argue that taking a home office deduction will lead to an audit. Subsequently, many taxpayers have decided that it is not worth the supposed risk. This could be a mistake. Any deduction you are entitled to, you should take. If you keep accurate records and meet all the IRS regulations for the deduction, you should discuss this deduction with your CPA.

IRS will be scrutinizing rental properties

Audit: IRS needs to better examine rental real estate
By Bernie Becker - 03/09/11 03:27 PM ET
The IRS needs to step up its examinations of tax returns that contain losses from rental real estate, a new audit has found.

A new report from the Treasury Department’s inspector general for tax administration found that, if the IRS’s compliance initiative program reviewed more returns dealing with rental real estate, the government could collect an additional $27.3 million over five years.

“Given the magnitude of underreporting in our voluntary system of tax compliance,” Russell George, the tax administration inspector general, said in a statement, “even small improvements in the IRS’s examination of tax returns with rental real estate activity could increase taxpayer compliance and generate substantial additional revenue to the federal government, helping reduce the tax gap.”

The inspector general looked into the matter because of a 2008 Government Accountability Office report that said that more than half of taxpayers who at least dabbled in rental real estate during the 2001 tax year misreported that activity, leading to $12.4 billion being wrongly reported. (According to the IRS, roughly 7 percent of 2001 individual tax forms contained rental real estate activity.)

For its part, the IRS did not agree with the $27 million figure computed by the inspector general. But it did agree with the audit’s recommendations, including one that called for revising a certain tax form.

The Markets: February 28, 2011

March 01, 2011
MARKET WEEK: FEBRUARY 28, 2011
The Markets

Despite three straight days of selling that included back-to-back triple-digit losses, the Dow managed to stay above 12,000; the S&P did the same with the 1300 mark. However, the domestic equity indexes lost anywhere from a quarter to a third of their year-to-date gains to profit-taking from the recent multi-week rally and unease about political conflict.

Market/Index 2010 Close Prior Week As of 2/25 Week Change YTD Change
DJIA 11577.51 12391.25 12130.45 -2.10% 4.78%
NASDAQ 2652.87 2833.95 2781.05 -1.87% 4.83%
S&P 500 1257.64 1343.01 1319.88 -1.72% 4.95%
Russell 2000 783.65 834.82 821.95 -1.54% 4.89%
Global Dow 2087.44 2241.29 2194.22 -2.10% 5.12%
Fed. Funds .25% .25% .25% 0 bps 0 bps
10-year Treasuries 3.30% 3.59% 3.42% -17 bps 12 bps
Last Week's Headlines

As the rebellion in Libya spiraled out of control, oil prices reached their highest level since fall 2008.
Home prices in the 20 cities tracked by the S&P/Case-Shiller index fell by an average of a full percent in December. Prices are now down 2.4% from the previous December, and average prices for the fourth quarter of 2010 were at roughly the same level as in the first quarter of 2003.
January sales of existing homes were up 2.7% from the previous month, according to the National Association of Realtors®. However, the Commerce Department said sales of new homes fell 2.4% in January compared to December.
The economy grew more slowly in the fourth quarter than the Commerce Department originally estimated. The 2.8% revised figure was down slightly from the original 3.2% estimate. The Bureau of Economic Analysis said higher consumer spending, exports, and residential investment were offset by a decline in nonresidential fixed investments, slower private inventory investments, and reduced federal, state, and local government spending.
Eye on the Week Ahead

Investors will keep a nervous eye on the conflict in Tripoli, assessing the potential impact that higher oil prices might have on the economy. Also watched will be the congressional conflict over the budget deficit as the March 4 deadline for raising the nation's debt ceiling approaches. Finally, Friday brings unemployment data.

Key dates and data releases: Personal income/spending, pending home sales (2/28); U.S. manufacturing, construction spending (3/1); Federal Reserve "beige book" report (3/2); labor productivity and costs, U.S. services sector (3/3); unemployment, factory orders (3/4).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. Equities data reflect price change, not total return.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.