What if a spouse is going to take half the other spouse’s social security?
The software only allows a spouse to enter their own Social Security. To enter a situation where Party B is taking half of Party A’s Social Security, please do the following: 1. On the Income, in the section for income other than wage income, find the line for Social Security income and click “more info”. […]
The Social Security income projection seems off. Why?
Be sure to indicate that the amount you enter is “per month” or “per year,” as appropriate for your case. If you entered a monthly amount, but the program is treating it as “per year,” it will be insignificant in the charts. Also: If the client won’t be age 62 (or 67 or whatever retirement […]
How can I find the present value (PV) for spousal support (the lump sum buyout amount)?
There are two ways to get the present value calculation: (1) If you have already entered the parties’ income and expenses into the software; or (2) If you have not. We will describe each of these approaches. 1. If you have already entered the parties’ income and expenses. Go to where you enter the spousal […]
Can a party who does not live in the marital residence claim the mortgage deduction for it?
In general, a party must live in a residence in order to claim the mortgage deduction for it. For more information, see IRS publications 504 and 936. In Publication 936, search for the definition of “qualified home.” An exception may apply if the title is in joint names and the payer is obligated to pay […]
How do I enter rent for a party who is paying rent?
You can enter it where you enter expenses. There will be a Real Estate section, and you will see a button to enter “Tenant expenses.” If both parties are paying rent on two separate apartments, you would create two separate tenant expense items. One would be for one party and one would be for the […]
How can I more precisely account for the tax on sale of real estate?
The Sale of Real Estate Report shows an estimated tax amount. But this is only a rough estimate, made by applying a marginal capital gains tax rate to the taxable gain. It will not reflect a situation where the gain causes a change in tax bracket, or the impact of the alternative minimum tax, or […]
How do I enter responsibility for the mortgage shifting from one party to the other?
Here is how to specify that Party A is taking the mortgage over from Party B after, for example, four years: 1. Set Party B as initially paying the mortgage. 2. On the “more info” screen for the mortgage, specify that Party B will make a balloon payment in the amount of the balance at […]
Should I enter a real estate investment property as Real Estate or Cash & Investment?
You may choose either one, based on the level of detail you wish to enter. If the real estate is more of a passive investment, where it is enough to enter net value and rate of return (or dollar amount of return), then Cash & Investments would be fine. Use the Real Estate screen if […]
How are real estate sale proceeds reflected in the software?
When a home is sold, the proceeds show up on the Net Worth and Summary Totals spreadsheets, but not in the Budget Report or cash flow spreadsheets. Otherwise, the large income number would distort the cash flow picture in the year of sale. Also, if there are federal taxes to be paid on the sale, […]
What if one spouse has contributed to the down payment?
Suppose Party A made an initial down payment of $70,000, and the home is about to be sold. In the sale, the parties want it to come out that Party A would take out $70,000 more than Party B. Responsibility for the mortgage, however, is being shared 50-50. What you can do is to create […]