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  1. #1

    Default Exemptions And Exempting Taxes

    Hi Everyone, new here & have a question.

    I'm in CA and we have a Homestead Exemption (System 2) of $20,075 and a wild card of $1,100. We are surrendering our home (another story) and are planning to take the $20,075 "in lieu of the homestead" & wild card to exempt our SUV, p/u and a damaged boat. The SUV is worth $20k and has a loan remaining of $8,900 (we are reaffirming). The p/u is worth $3k (if that) and our boat (damaged last year) is worth $7k (not running).

    My question is...after the exemptions, can we used what's left over to keep some of our 2007 tax return? Here's the breakdown:

    $20,000 (value of SUV)
    -$8,900 (loan remaining)
    $11,100 (equity after loan)
    -$3,300 (CA vehicle exemption)
    $7,800 (take "in lieu of homestead")

    $7,000 (boat value)
    +$3,000 (p/u value)
    $10,000 (take "in lieu of homestead")

    $10,000
    +$7,800 (amount from above)
    $17,800 (Total "in lieu of homestead" exemption)

    $21,825 (CA homestead & wild card exemption)
    -$17,800 (Grand total exempted)
    $4,025 (left for exempting an 2007 taxes)

    Does this look correct? Our lawyer wasn't concerned with the 2007 tax return (last year we received $6k). This year we are not expecting that much (only one income and changed deductions to 5). We might even owe, who knows???

  2. #2
    Almosthome Guest

    Default Re: Exemptions And Exempting Taxes

    I would be highly reluctant to give you any legal advice contrary to what your lawyer is telling you but I have a few comments: 1) Did you schedule the tax refund as an asset? If not, why are you seeking to exempt it? 2) How do you arrive at those property values? Are they accurate, conservative, or low-balled? 3) Why exempt your truck at all? I doubt seriously any trustee would seek to liquidate a $3,000 asset and s/he may be barred by law (I think the test is whether it will produce a "meaningful distribution to creditors.") Why not just abandon it? 4) Are you allowed to combine federal and state exemptions like that in Ca? Here (in Pa.) we have to opt for one or the other. 5) You say "we" did you double your exemptions if you filed jointly? For example, don't you get to exempt one car per debtor?

    Having said that, your analysis seems accurate.

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