Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.
Q: I would like to know about imputed interest on deposits on retirement homes where the deposit is returned. How much are you allowed to deposit at the retirement home before you run into imputed interest?
A: The IRS uses imputed interest when there is no stated interest on a loan or a sale with deferred payments. In the case of a deposit at a retirement home, the retirement home would either pay interest on, or not offer interest on the deposit. When the deposit was returned to you, if you received more than you
deposited, the difference, most likely, is the interest income.
Q: My husband and I jointly owned some stock. He died last May and two months later, I liquidated the stock, sustaining a capital loss of $16,000. I know I am only entitled to deduct $3,000 of this loss per year, but can I use the complete $16,000 or only half of it?
A: The $16,000 is your total loss. For your 1994 return, you may use up to $3,000 to offset $3,000 in ordinary income. The $H remaining $13,000 may be used to offset ordinary income in future years.
The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.