Clarification / IRA/CD impact on Senior Property Tax Exemption
Hi Terry, thank you for answering my inquiry on 8-15-18 IRA/CD. I am still wondering if converting the $16,000 IRA/CD to something more liquid counts towards the adjusted gross income on our tax return. I don’t want to jeopardize our qualified senior Real Estate exemptions. My plan is to utilize some of these funds for possible house repairs.
Your thoughts please. Thank you for all of your previous suggestions.
Ray
Terry Says
The senior freeze exemption in Cook County, Illinois is based on the following:
To qualify for the taxable year 2017, you must meet all of these requirements:
•Be 65 years of age of older in 2017,
•Have a total gross household income of no more than $65,000 for 2016,
•Own the property, or have a legal, equitable or leasehold interest in the property on January 1, 2016 and January 1, 2017,
•Be liable for the payment of 2016 and 2017 property taxes, and
•Use the property as a principal place of residence on January 1, 2016 and January 1, 2017.
If, you’re just changing the nature of your investments, but not increasing your income over that limit, your senior exemption will not be impacted. In fact, as you spend down the money, your assets will diminish, and possibly so will your income. Remember, you must re-apply for this exemption every year.
