Proposition 13, the voter initiative passed in 1978, allows property owners protection from skyrocketing property taxes.

If you are a parent selling or transferring title of your home to your child or a child doing the same to your parents, then your property can be excluded from reassessment under proposition 13.

This law applies not only to parents and children but also to parents and son-in-laws and daughter-in-laws so long as they’re not divorced.

However, in order to take advantage of these exemptions you must apply for them; they do not happen automatically.

Talk to a professional tax consultant if you feel you can take advantage of this exemption to save some money.

Thanks to Jon Zagaris for pointing this out.

For our insured and for our agents who spend countless hours on their cellphones, take heed of the new cellphone law in effect July 1st of this year. At that time, it will be a ticketable offense to talk on your cell phone while driving. That means you can get pulled over and fined $20 for the first offense and $50 for subsequent offenses.

There are some exceptions, you can still:

• Use a hands free device such as a Bluetooth headset
• Use your cell phone’s speaker phone functionality
• Dial numbers
• Text message (WARNING: It is at the officers discretion to ticket.)
• Use push-to-talk if you are operating commercial vehicles
• Emergency vehicles such as ambulances and firetrucks

The law takes effect on July 1, 2008 and there is no grace period.

PMZ Insurance Services commented that, “while there is no point charged for a violation, we are unsure how this will be handled by insurance carriers. The seat belt laws that were put into place years ago do not charge points against your license, but Insurance companies do take these into consideration – especially if there are two or more or if the driver has other violations too.”

If you want more information, check out the attached CHP Cell Phone Law FAQ Sheet or contact PMZ Insurance Services at (209) 338-0385.

The Federal Reserve slashed two key interest rates by three-quarters of a percentage point Tuesday following an unscheduled meeting, citing continued concerns about a weakening economy and turmoil in the financial markets.via: CNNMoney

President George W. Bush signed legislation into law on Thursday that will ease the tax burden for home owners who have had debt forgiven on a mortgage due to a foreclosure, short sale, or deed in lieu of foreclosure. The bill — Mortgage Forgiveness Debt Relief Act — has been supported by NAR since the 1990s.

“The president offered a Christmas present to many people who have suffered the agony and humiliation of losing their home,” said NAR President Dick Gaylord in a statement. “Today’s bill will ensure that any debt forgiven on a mortgage secured for a principal residence will not be taxed. This is very significant legislation.”

The tax code used to require a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower had been forgiven. If the property was sold at foreclosure or was sold for less than what was borrowed, that difference was considered income and subject to the tax.

“We have always believed that it is clearly an issue of fairness and of not kicking people when they are down,” Gaylord said. “By making the forgiven debt taxable income, individuals in already unfortunate situations most likely faced IRS actions because they did not have the money to pay the additional taxes. This legislation will relieve that additional burden and may also encourage families to work with their lender to negotiate terms, knowing they will now not be subject to an IRS bill.”

Other Legislation Making Its Way to the President

Also, this week, the U.S. House passed two other bills — which have already passed the Senate — that could have a big impact on the real estate industry.

The bills are:

• Mortgage Insurance Tax Deductibility. This bill makes mortgage insurance premiums tax deductible for all mortgages originated for the next three years. Mortgage insurer Genworth Financial estimates that this tax break is worth $350 to the average taxpayer who has purchased a home with less than 20 percent down.
• Terrorism Risk Insurance Act. Federal backstops for terrorism insurance, passed initially after the Sept. 11 attacks, have been extended for another seven years. The bill also expands the program’s protection by including domestic terrorism. The insurance and real estate industries have pushed for an extension, saying federal guarantees to help cover catastrophic losses are crucial to stimulating the investment needed to spur economic growth.

via Realtor.org