Homeowner tax breaks lost in translation

If you are a homeowner who wants to be aware of virtually every possible tax saving break, “J.K. Lasser’s Homeowner’s Tax Breaks” by Gerald J. Robinson Esq. is a good guidebook. It highlights almost every home ownership tax benefit, usually making the explanations easily understandable.

However, the book should contain a warning on the front cover stating, “Information in this book should be verified with your personal tax adviser because the author failed to include documentation to support his statements.”

Purchase Bob Bruss reports online.

For example, in the chapter about avoiding tax on the sale of a high-priced home exceeding the $250,000 or $500,000 tax exemption of Internal Revenue Code 121, the author explains his “leasehold carve-out” method. Too complicated to explain here, the method involves an option to purchase the land beneath an expensive house. But the author fails to cite any court decision or tax ruling upholding this method.

The trusted name of the late J.K. Lasser has stood for expert tax advice. The annual “J.K. Lasser’s Your Income Tax” is always a best seller. But this new book is far below the high standards of that authoritative tax manual.

Although author Gerald J. Robinson’s education and experience credentials for writing this tax book are above question, some of his terminology is hard to justify.

To illustrate, when explaining rental vacation home tax deductions, the author creates a “fair share rule.” Then he says, “This fair share rule provides that your deductions attributable to rental use are limited by a rental ratio.” As a reviewer knowledgeable in real estate tax law, I’d like to know the statute or case law source of the “fair share rule.”

The glaring fault of this new book is its failure to justify broad statements with either statute or case citations. There are many examples to illustrate the topics explained, but there are no references to sources for the conclusions so taxpayers and their tax advisers can obtain authoritative source information.

In an attempt to make tax laws that apply to homeowners understandable and enjoyable, the author made this book bland and lacking in detail. His examples surely must have had some foundation in statute or case law, but readers aren’t given any clues for his reasoning to make bold statements without more justification. A better approach would have been to cite the statute or case on which the example or statement is based.

Chapter topics include “Deductions in Year You Buy Your Home”; “Recurring Deductions Every Year You Own Your Home”; “Special Situation Deductions for Homeowners”; “How to Sell Your Home with No Tax on Gain”; “The High-Priced Home: How to Avoid Tax When Gain Will Exceed the $250,000 or $500,000 Ceiling”; “When Spouses Split”; “Little-Known Loopholes Can Provide Big Savings”; “Your Vacation Home as a Tax Shelter”; “How to Get Tax-Free Dollars in Retirement from Your Home”; and “Reducing Estate Tax on Home.”

Perhaps I am too skeptical, but if a reader is going to rely on the tax advice in this book, there should have been citations for the author’s authorities to make his often-innovative tax strategies. Although the book’s concept and organization are superb, the details for the statements made are sadly lacking. On my scale of one to 10, this very disappointing new book rates only a six due to its lack of justification details.

“J.K. Lasser’s Homeowner’s Tax Breaks,” by Gerald J. Robinson (John Wiley and Sons, Hoboken, N.J.), 2004, $16.95, 195 pages; available in stock or by special order at local bookstores, public libraries and www.amazon.com.