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Old 01-31-2010, 12:46 PM
 
3 posts, read 9,553 times
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Help!

NJ State Income Tax sent me a letter recently stating that I owe part of the refund I got back from the state in 2006, because I claimed the full 100% of my home's property tax that year (which I did). However, because there were two names on the deed, by "law" I can and should have only claimed 50% of the property tax. I told them by phone that yes, there was someone else on the home's deed at the time, and that the person did not live at the house, and that I paid the full mortgage and the full property tax that and subsequent years until that other person came off the deed. They said that the "law" does not look at who paid the property tax, but rather who's on the deed. And the fact that the other person was not living in the house or claiming the other 50%, that other 50% is considered a "loss" --- again, I can only claim 50%, the other 50% is a loss.

The letter requests to provide proof otherwise, which I intend to do by submitting proof that I paid the entire mortgage and the full 100% of the property tax, but when I called them, they told me what's stated above.

Has anyone heard of such a NJ state law? And if so, what law statute number or whatever is it? A law that says if two people are on the deed, each person can only claim 50% of the property tax regardless of who actually paid it? Again in my case, I was the only one who's been living in the house and have been paying everything. This is hurting me in the sum of $288.99 and that's just for 2006. They're going to be sending me letters for 2007 and for 2008 also (October of 2008 is the year when the other person was finally taken off the deed). They also only give you 30 days to pay the refund payback and my due date is 2/7/2010; after than date there are monetary 'penalties' added to the original payback amount---but I'm going to send in my proof instead.

Anyone know if I have a leg to stand on here? Thanks!
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Old 01-31-2010, 12:51 PM
 
1,111 posts, read 2,647,300 times
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It would make sense that if 2 people are on deed, then you should only be able to claim 50%. My question is, why are you paying FULL mortgage when you only own half of it? Sounds like you are getting ripped off. Remove the other name from deed to fix all your problems. If the other person dont want to be removed, then they should pay their half.
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Old 01-31-2010, 01:37 PM
 
Location: New Jersey
3,814 posts, read 8,072,459 times
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Quote:
Originally Posted by salb222 View Post
NJ State Income Tax sent me a letter recently stating that I owe part of the refund I got back from the state in 2006, because I claimed the full 100% of my home's property tax that year (which I did). However, because there were two names on the deed, by "law" I can and should have only claimed 50% of the property tax.

Has anyone heard of such a NJ state law? And if so, what law statute number or whatever is it?
That information should be in the letter notifying you of the need to return a portion of the refund. If it is not, you should request that information from the Tax Department which sent you the notification -- you need to know from them the specifics which they used to make that determination in your case.
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Old 01-31-2010, 04:50 PM
 
3 posts, read 9,553 times
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Thanks for both of your replies. The other person on the deed moved out in 2002, and never made any claim to the house on their own taxes. I never bought them out then as I could not afford to. I stayed in the house and therefore paid everything since they moved out. It was only until October of 2008 that I bought the other person out of the house and their name came off the deed.

The letter from the NJ State of Taxation did not include the specifics of the law itself; the law was only mentioned when I called Trenton to ask about the letter. I will try to get that info from them tomorrow (the statute or whatever law "number").

I still think it's unfair that if I can prove that I paid the full property tax for all those years that I shouldn't be able to benefit from the tax break. It does not make sense to me that the other 50% is a "loss" if the other person wasn't living there, wasn't paying half the mortgage, nor half the property tax, that I should get penalized for that.

Appreciate your responses. Thanks. Let's see what others may say if they read all this.
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Old 02-06-2010, 05:59 PM
 
3 posts, read 9,553 times
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UPDATE: Well, I just got hit for 2007 and 2008 tax years today. NJ State Div of Taxation sent two separate notices for each year indicated how much I owe the state back in State Income Tax refund for both years---about the same as 2006. However, these notices were a different (not in letter form) in that they looked like the type of notices you get when the state sends you your refund (you have to rip off three sides of the notice to get inside, etc.). Each had more details about the wages, taxes and refund from that particular year, the adjusted property tax and what I should have been refunded and what is now due. They also do not include any real explaination other than pay this amount by 3/15/2010 or your new total payment will be XXX.XX a higher amount that includes a penalty and the penalty seems to be about $12 or so more.
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Old 02-06-2010, 06:25 PM
 
Location: Long Branch
390 posts, read 1,001,935 times
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Sorry to hear that. I guess a tax lawyer would be too expensive unless you can find one that offers 30 minute free consultations.

I wonder if your roommate (do you stay in touch on friendly terms?) can file an amended return for those 3 years?

I looked at the 2006 NJ tax forms and it does say to split the deduction among the owners not including spouses. It doesnt list any means test to determine otherwise.
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Old 08-06-2010, 07:18 PM
 
1 posts, read 2,341 times
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Any update to this post? I just rec'd the same letter. If I was to refund the $, that means NJ makes out since the co-owner on my house does not claim the property. So that NJ does not get over here, is there a way to amend a 2006 tax return so I can make sure the co-owner takes the 50% deduction back from NJ?
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