European Stars And Stripes (Newspaper) - February 18, 1987, Darmstadt, Hesse                                Facts on taxes to itemize or not to itemize associated press because of a change in Irea Mont of charitable contributions this could be the year that you Are better Oft not itemizing you Federal income tax  a Rule if your itemized deductions exceed the Standard deduction allowed your filing status $2,480 Lor a single person �3,670 for a couple Ming jointly or $2,480 for a head of household it will pay you to itemize. For 1936 returns taxpayers who do not itemize will be allowed to deduct 100 percent of their charitable contributions. Special rules May apply for the few people whose contrib Lions exceed 20 percent of adjusted Gross income. Elem tiers must subtract the Standard deduction from total itemized deductions including contributions to determine How much is deductible. So unless you have a considerable amount of medical expenses in Crest state and local taxes or miscellaneous deductions your allowable charitable deduction May be less than it you did not itemize Here s an example assume you and your spouse filing a join return have $500 Worth of charitable contributions and your other itemized deductions total $3,500. Subtracting the 53,670 Standard deduction from hit total leaves allowable itemized deductions of $330 or $170 less than if you did not itemize in some cases the government requires taxpayers to itemize regardless of the size of their deductions thess include a married person Whoso spouse Lilas separately and itemizes and a person who can be claimed As a dependent on a Parent s return and had unearned income such As interest and dividends of at least 11,080. Itemizes have Felt for years that the sales tax tables prepared by the internal Revenue service were too stingy. Now that ih8 deduction is being wiped out the irs has become More generous. If you itemize you have iwo options for Waling off your sales taxes deduct All that you can substantiate with receipts or use the irs tables. For the first time in Many years the tables have been updated to relied inflation and thus of Lar a Largo do Duclion for most people. For example a four member family living in Indiana Wilh $33,000 income was allowed to deduct Only $377 in unsubstantiated sales taxes under Tho old tables but can take $431 under the new table a family of three in Virginia with $70,000 income previously limited to a �433 deduction without keeping receipts May now deduct 1582. A $25,000-a-year single person in California May deduct $345. Up from $285. If you us the tables be certain you count All available income in calculating your total deduction. This Means you should add to adjusted Gross income line 32 such things As the two earner deduction and any non taxable income. Do not add any individual retirement account contributions since that Money was not available to spend. Add to the figures in the tables any sales tax paid for a truck car motorcycle or Mobile Home. You also May deduct sales lax on a boat plane Home or materials to build a new Home if the tax was at the same rate As the general sales lax and if your receipt states the tax separately. Under the new tax overhaul this is the last return on which sales taxes May be deducted some things to remember it you sold your principal Home last year you avoid immediate taxation on the profits if within two years of the Sale you buy another principal Home costing at least As much As you got for the old one minus such qualified Selling expenses As broker fees and fix up costs any part of this adjusted sales Price that is not reinvested in the new Home is taxable As a capital gain hat is 40 percent of the profit is taxed As Ordinary income. This deferral is mandatory if you buy another Home within the specified period. Taxes on the deferred profits Are not forgiven instead the untaxed gain reduces the basis of your new Home that is the value of your stake in it so that when it is sold a greater portion May be subject to tax. Income averaging May reduce the lax bite if you do not invest your Home s Sale profits in another Home. This requires the filing of schedule g irs publication 506 tells How it is done. If you arc at least 55, you May exclude up to s125,000 of the profits from taxation. A couple filing a joint return May claim the Benefit if either spouse la at least 55. For a married person filing separately. The exclusion is limited to $62,500, you must have owned and lived in the Home at least three of Tho last five years. This exclusion May be taken Only once in a lifetime you May not lot example use $60,000 of the Benefit in 1986 and the remaining �65,000 later. Use form 2118 to report details of your Homo Tola if you qualify for either a deferral of taxes on profits or the once a lifetime exclusion. Any taxable part of the gain a reported on schedule d. Irs publication 523 explains All the tax implications of Selling your Home. Families with children and earnings under 111,000 a year May reduce their taxes by As much As �550 if they qualify for the earned income credit. The credit May be claimed by filing either form 1040 or 10ca, read the instructions in your tax package to get an idea if you Are eligible Ash the internal Revenue service for publication 596 for All the details in general you qualify ii you earned income last year wages tips fees and the like your adjusted Gross income was less than $11,000 you had a child living with you for More than six months in 1986 and you Ilia a joint return if married or As head of household or qualifying widow or widower with a dependent child. The earned income credit is like no other in Federal tax Law even if your credit is More than the tax you owe the government will Send you a Check. If you bib qualified you May ask your employer to make advanced payments of the credits to you in your paychecks each pay period Twa could have the effect of boosting your take Home pay by As much As $10.57 a week. The credit increases As earned income or adjusted Gross income rises hits the maximum �550 for incomes Between �5,001 and 16,500 and then declines until disappearing when income exceeds 111,000. Real estate no longer a tax shelter i want yours associated press he new tax Law has killed the tax shelter Tor real estate investments according to a consultant for a Chicago based research firm. This is both Good news and bad news for investors says Richard Kately executive vice president of real estate research corp., which specializes mainly in institutional investors. The Good news. Kately says is that the real Estale Market will be approached Tor sound profit oriented investments and not merely As a place to shelter Money adding real estate investment will have to be made on a return basis not on a shelter basis " the bad news he says is that there will be a sorling out As people try to find real Estale investment that successfully generate income not Sheller  according to Kately the Only direct tax Sheller left will be the single Lamry Home. The rest of the Markel is so out of whack because of overbuilding that it will be increasingly difficult Lor investors to find Good income producing investments in the past Calely says overbuilt markets were not necessarily bad places Lor investment because of tax Breaks. But he believes the reverse is now Rue and Many of those tax related investments that generated Fittue  now be bad investments. A Lack of expertise compounds the problem for j investors seeking income producing real estate he i suggests adding that real estate investments that uttered tax benefits traditionally were handled by i accountants and tax lawyers. But with the new tax Laws j and the toss of tax shelters investors will need advice on the Best managed and income producing properties two investments that will become More popular to j real estate investors Calely predicts Are the Raal j estate investment Trust reit and the master limited partnership . In our Annua Survey of leading experts concerning f emerging trends in real Estale two thirds of them believed thai investor interest in reits will Rise in 1987," he says. As Lor maps he notes the partnerships can be traded on a securities Exchange and also have the advantage of liquidity. Page 14 the stabs and stripes Wedney