Ken Himmler.com

Recently C.D. Ulrich CPA won a hard fought battle with the IRS. For years Ulrich really believed that the IRS was unfair to taxpayers (I really want to laugh right now but I am trying to be professional as I think the IRS has never been fair) when it came to the taxation of the stock they received from the demutualization of the insurance companies.

In the 90s many mutual insurance companies decided that they would go public and they went through the effort to sell their stock to the public. When they demutualized ( a mutual company is a company that is mutually owned by their policy holders) they not only sold stock to the public but the policy owners all got stock for owning policies.

You may have been one of the lucky (or so you thought) few that received notice that you were going to get a stock distribution from owning that policy until you also received a bill for taxes on the entire amount of stock distributed. As an example if you owned a policy with John Hancock and you received $100,000 in stock you would have been taxed on the entire $100,000.

Mr. Ulrich thought this was a rip off (like all the other financial planners out there) but he had the guts and staying power to fight the mighty IRS and he won.  His opinion was that if you are a mutual owner of a company you have paid for your policy which would constitute a cost basis for the stock. You are only getting an exchange for the premiums you paid. This means that if you take the first example of getting the $100,000 you would only pay tax if the $100,000 increased to $105,000. Then you would only pay tax on the increase of the $5,000.

Currently if you have ever received a distribution check from a company that has demutualized then you might be entitled to a refund. We are reviewing this for clients and people that contact us. The best way you can find out if you might be eligible for a refund is to send us an email to taxrefund@kenhimmler.com   Please let us know the company you received stock from, when and the amount. If we feel you might be eligible then we will contact you for more information. Please include your name and your mailing address and phone number in the email you send us.

In recent months we have seen the real estate market drop like a rock. Let’s face it for those people that didn’t see it coming they either had their head in the sand or had some distant relative that got caught in the 1849 gold rush fever and it is in their DNA. In some parts of the country property values have dropped 50% to 60%. Our local governments had a fun time increasing services, pay raises, increased benefits and hiring like there was no tomorrow. Now that property values Read more…

Recently I spoke about the benefits of not being married. The US Tax Code, the Medicaid System, and many other parts of our financial society penalize you for getting married. This is odd, considering we are in a country that boasts of the large commitment to church. It would seem that the Government would offer benefits to you to get married but that is not the system we have – so complaining about it won’t change it. In a recent forum, Read more…