TAXES
Amended 1099 raises question
Q: I filed my federal return on March 10, received an amended 1099 dated March 15, a second amended 1099 dated April 1, and then a third amended 1099 dated April 15! The total net changes are less than $20. Filing a 1040x for 2012 seems like a lot of pointless work. Can I account for these changes on my 2013 federal return rather than file a 1040x for 2012?
A: Gregory Burke, a former IRS auditor and longtime CPA in Sacramento, Calif., says: You are not alone in receiving a corrected 1099 containing small dollar-amount changes. Brokerage companies are sending them out by the thousands. The general rule is that each tax year stands alone. It would not be appropriate to report a 2012 change on your 2013 tax return.
The more pertinent question is whether you should amend your 2012 return when the change in tax owed would be inconsequential. In my opinion, the answer is “No.”
A $20 change in interest or dividend income would produce, even at the top 35 percent federal tax bracket, no more than a $7 change in tax.
My recommendation would be to keep the corrected 1099 with your 2012 income tax return and let the IRS decide whether to send you a notice asking for the additional tax.
Chances are they won’t, as it is probably not worth their expense. Even if they do, the interest on the additional tax is probably a lot less than the cost of amending a return.
— Claudia Buck,
Sacramento Bee
AUTO REPAIR
Gas gauge is stuck on full
Q: I have a 2000 Chrysler minivan with 65,000 miles. The last time I filled my gas tank, the dash gauge went to “full” and will not move, after being driven 200 to 300 miles. What is wrong? A fuse maybe? Would you suggest using the trip odometer?
A: Does the needle on the fuel gauge move when the ignition is first switched to “on”? If not, the problem could be in the instrument cluster. According to my Alldata automotive database, Chrysler built in a simple self-test for the instrument cluster. With the ignition in the “off” position, press and hold the “Trip” and “Reset” buttons simultaneously. Turn the ignition switch to the “on” position and continue to hold the “Trip” and “Reset” buttons until the word “Code” appears in the odometer window. If there’s a problem with the cluster, a three-digit DTC fault code will show. If there are no problems with the cluster, “Code 999” will momentarily appear. Have a scan tool check for any BCM (body control module) fault codes. Also, the function and calibration of both the fuel gauge and sending unit can be checked for accuracy.
— Paul Brand
Minneapolis Star Tribune
REAL ESTATE
Parents have co-signing issue
Q: My husband and I co-signed a loan for our son and his now ex-wife. Our son stayed in the home but fell behind on the payments. His ex-wife discharged her mortgage debt through bankruptcy, but her name is still on the deed. Our son has deeded the house to us, and we made payments to bring the property out of foreclosure. We’re trying to complete a short sale, but she won’t cooperate.
A: Co-signing a mortgage is always a risky move because it means that borrowers are responsible for the loan payments without rights in the house that is securing the loan. You at least have rights because your son deeded the home to you, but your patience will be tested by your former daughter-in-law. Check divorce papers to see if the court ordered the ex to deed the property to your son. If that’s the case, and she hasn’t complied, your son can point that out to the judge. Explain to her that she has the responsibilities of ownership, even though she no longer owes the bank. She could be personally liable to the homeowner’s association and tax collector.
— Gary M. Singer
Fort Lauderdale Sun Sentinel