ASSISTANCE ON IOWA TAX RETURNS

TAX LOSS HARVESTING

A useful year-end move to counteract capital gains. Even though this has been a poor year for the market, you may realize short-term capital gains. What do you do about them? You could do what many savvy investors do - you could "cash in your losses" and practice tax loss harvesting. Selling lose...

MAKING INVESTMENT DECISIONS

Are your choices based on evidence or emotion? Information vs. instinct. When it comes to investing, many people believe they have a "knack" for choosing good investments. But what exactly is that "knack" based on? The fact is, the choices we make with our assets can be strongly influenced by fa...

RECESSION RECOVERIES: 2001

What happened, how the markets came back, and the rewards for the patient investor. The numbers. According to the National Bureau of Economic Research (which has made a point of chronicling all U.S. recessions), this downturn lasted from March to November of 2001.1 It is one of the milder recess...

DOLLAR COST AVERAGING IN A DOWN MARKET

This investment technique may help you take advantage of the downturn. The central idea: buy low, and sell high. It's the oldest stock market adage, and in the wake of the recent selloff, dollar cost averaging may give you a method to capture lower prices today and come out ahead tomorrow.How it...

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WELCOME TO BAKER & ASSOCIATES, L.L.P.

Welcome to Baker & Associates, LLP. We are an accounting firm that focuses on individual and business tax planning and preparation needs; small business accounting, attest, and compilation services. We offer a full range of services that includes:

Proactive tax planning to take advantage of timely tax saving opportunities.
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Each of our clients is extremely important to us. We apply knowledge and expertise accumulated over many years to give direction and customized advice to each client. We are not merely historians but are directly involved in creating and influencing the unfolding of history. Our objectivity and overall understanding of our clients' needs enable us to provide critical business advice in a variety of situations.

ASSISTANCE ON IOWA TAX RETURNS

Thursday, 05 November 2009 21:28

REPORTING DISASTER ASSISTANCE ON IOWA TAX RETURNS - The Iowa Department of Revenue is reminding taxpayers of the proper treatment of reporting disaster assistance this tax season. The financial assistance received under the Jumpstart Iowa Housing and Small Business programs must be reported for Iowa tax purposes in the same manner as reported on the federal tax return. After discussions with federal officials, the financial assistance received under these programs must reduce the amount of casualty loss allowed as a deduction on an individual's or small business's federal and Iowa income tax return. This is similar to how insurance proceeds reduce the amount of casualty allowed to be deducted. If no casualty loss is claimed on federal and state income tax returns, then the financial assistance is not reported on the federal and state return.

For example, $10,000 of Jumpstart assistance received in 2008 for a $40,000 casualty loss results in only $30,000 allowed as a casualty loss on the federal and Iowa 2008 tax returns. If Jumpstart assistance was not received until 2009, the $40,000 casualty loss can be deducted on the 2008 federal and Iowa return, and the $10,000 must be reported as a recovery of a previous deduction on the 2009 federal and Iowa returns.

If taxpayers reported a net loss on their 2008 Iowa returns due to a disaster loss, these taxpayers have two options. Taxpayers may elect to carry back the loss to prior tax periods and receive a refund of Iowa taxes paid for prior years. This can be done by filing amended Iowa tax returns for periods prior to 2008. In the alternative, the net loss may be carried forward to offset income for 2009 and subsequent tax periods.

Questions about Iowa tax law may be directed to Iowa Taxpayer Services at 1-800-367-3388 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

RECESSION RECOVERIES: 2001

Sunday, 08 February 2009 17:20

What happened, how the markets came back, and the rewards for the patient investor.

The numbers. According to the National Bureau of Economic Research (which has made a point of chronicling all U.S. recessions), this downturn lasted from March to November of 2001.1 It is one of the milder recessions on record; in fact, real consumer disposable income actually grew during this eight-month period. Gross domestic product fluctuated across the year: GDP was -0.5% in the 1Q, +1.2 in the 2Q, -1.4 in the 3Q, and +1.6 in 4Q 2001.2 The Dow Jones Industrial Average fell 7.2% across 2001.3 Unemployment rose from 4.3% to 5.5% during this period, eventually cresting at 6.3% in June 2003.4 By the first half of the year, inflation had more than doubled from a 1998 low of 1.5%.5 It was the housing sector that kept the economy going - and in many respects, sparked growth and recovery. The Federal Reserve cut the federal funds rate 11 times during the year; it fell from 6.5% to 1.75%.6

The reasons. The tragedy of 9/11 had an effect on the markets, but it was just part of the economic story behind this downturn. The dot-com bust and the subsequent recoil of the NASDAQ had opened the door - that index continued its descent, dropping from 2,341 at the start of 2001 to 1,577 at the end of the year.7 Accounting scandals (most notably at Enron and WorldCom) didn't help either.

The rebound. The stock market struggled through 2001 and 2002, but proved its resilience. After the closure of the stock market following 9/11, the Dow fell 685 points to 8920 on September 17 and lost 14.26% in a week to close at 8,235 on September 21. But the DJIA closed 2001 at 10,021 - a 21% rebound in less than three months. On October 9, 2002, the Dow closed at 7,286. But then the index closed October at 8,397 - a 15.25% gain from the October 9 trough in 22 days, and a 10.6% rise for the month.8 Those who got out of stocks soon wanted back in: in 2003, the DJIA gained 25.3%, the S&P 500 26.4%, and the NASDAQ 50%.9

The lesson. The markets do recover, often dramatically - and historically, the persistent investor has been rewarded for his or her optimism and perseverance. In the current economy, it helps to take a satisfying look back and see how the markets have rebounded and prospered after a downturn.

Dirk Dixon is a Representative with Ameritas Investment Corp and may be reached at 515-285-5546 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

These are the views of Peter Montoya Inc., not the named Representative nor Broker/Dealer, and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.

Citations. 1 nber.org/cycles.html [8/28/08]
2bea.gov/national/nipaweb/TableView.asp?SelectedTable=1&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Qtr&FirstYear=2001&LastYear=2001&3Place=N&Update=Update&JavaBox=no#Mid [8/28/08]
3 the-privateer.com/chart/dow-long.html [8/08]
4 sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/01/24/BUM3UKED0.DTL [1/24/08]
5 realtor.org/intlprof.nsf/1c8e38bf483f911d8625681100462df1/b171ee782198e89e86256b10006a8c3c?OpenDocument [2002]
7 the-privateer.com/rates.html [8/5/08]
7 finance.yahoo.com/q/hp?s=%5ENDX&a=00&b=1&c=2001&d=11&e=31&f=2001&g=m [8/28/08]
8 the-privateer.com/chart/dow-long.html [8/28/08]
9 upi.com/Business_News/2003/12/31/UPI_NewsTrack_Business/UPI-75601072911443/ [12/31/03]