IRS has bad news on Road Home

[funkybutt]

Source: Times Picayune, New Orleans

Grants are taxable for some recipients

Now that the Road Home has paid out more than 50,000 grants, many of those recovering homeowners are encountering a new cruel reality: They may have to send up to 35 percent of the federal grant right back to Washington in the form of income taxes.

If they claimed a casualty loss for their damaged property as a deduction on their 2005 tax return, they must add the grant to their taxable income in the year it's received.

-snip-

"Now, I get calls from people who've just gotten their Road Home money, and they want to know what the tax implications are," Suhor said. "If I claimed a loss for them in 2005, I say you ought to think about putting some of the money away for taxes before using it for rebuilding. ... They've been waiting on this money to rebuild, and now this."



Read more: http://blog.nola.com/times-picayune/2007/09/irs_has_bad_news_on_road_home.html

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:grr: