Tax credits for 'green' lawn equipment may be on the way
The government already provides handsome tax credits for homeowners who make energy-saving improvements. Now it's pondering the idea of giving credits to those who buy "green" lawn mowers and other garden equipment.
Q. Is it true that Congress is considering a bill that would provide tax credits to people who buy so-called green lawn mowers, grass trimmers and other types of garden equipment?
A. Yes. In late April, three Vermont legislators introduced a measure that would provide a 25 percent tax credit of up to $1,000 to taxpayers who purchase a variety of power garden tools - from mowers to tillers - that use "little or no fossil fuel." Equipment that would qualify for the credit include those that run on electricity or rechargeable batteries, solar power, natural gas or propane.
Remember that a tax credit is much more valuable than a tax deduction, because each dollar in credit knocks an equal dollar off your tax bill. A deduction only reduces your bill by your overall tax bracket: A $100 deduction, for example, would save you only $25 if you are in the common 25 percent bracket.
The credit is the latest proposal to help progress President Barack Obama's clean energy plan. Congress has already approved even more lucrative credits for property owners who install energy-efficient windows, water heaters, roofs, insulation, heating or cooling systems and a handful of other improvements that are made in 2009 and 2010. Those who install most types of solar- or small wind-powered systems (or make certain other major improvements) already qualify for a staggering 30 percent tax credit, and those credits won't expire until 2016.
It's likely that the new bill, appropriately called the "Greener Gardens Act," will also be approved by Congress and signed by Obama soon. So if you are thinking about buying a new lawn mower or other garden equipment now, you might want to wait a month or two so that you can get the tax credit if you buy a qualifying machine.
Q. Is it legal for a county to demand that a homeowner have an insurance policy to protect against fires or other hazards?
A. No. It's kind of stupid, but every state has a law that requires car owners to have insurance, but none of them require insurance on a house.
Banks, however, look at the issue much differently: They won't give you a mortgage if you don't have a policy lined up first. And if you fall behind on your insurance payments, the lender can file foreclosure proceedings against you, because keeping an up-to-date policy is part of a standard loan contract.
Q. I divorced my wife last year because she used a lot of drugs, and the judge gave me sole custody of our 7-year-old daughter. We reached an agreement for me to buy out my ex-wife's half-interest in our home, which I have already done. Now that she has signed the quitclaim deed, should I put my daughter's name on the home's title as a joint tenant so that my daughter will automatically inherit the home after I die?
A. I understand why you want to add your 7-year-old daughter's name to the title of your property, but doing so would be a terrible decision.
Most states allow minors to be added to the title of a home. The trouble is, they also forbid minors from conveying their title to someone else until they reach legal age - usually 18 or 21 years old.
If you put your minor child's name on the title now but then decide to refinance or sell before she reaches legal age, you would likely have to first go through the expensive process of getting a court-appointed guardian to protect her interest in the property. It's doubtful that the judge would allow you to be her guardian - even though you're her father - because your shared ownership of the home with her could create a conflict of interest.
A better choice would be to form an inexpensive living trust to hold title to your property and name your daughter as the trust's sole beneficiary. That way, you could keep total control over the house while you are alive. The trust also could be easily arranged so that if you die or become legally incapacitated before your kid reaches legal age, your hand-picked "successor trustee" - perhaps a trusted relative or friend - could quickly step in and take care of the financial affairs until your daughter is old enough to do it for herself.
Forming a trust would be much better than creating a will that leaves the home to her, because trusts don't have to go through the costly and time-consuming process that all wills must go through.
• For a copy of the booklet "Straight Talk About Living Trusts," send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 2960, Culver City, CA 90231-2960.
© 2009, Cowles Syndicate Inc.