JULY 2011
Khaas Baat : A Publication for Indian Americans in Florida


By Kamlesh H. Patel, CPA

Many charities use your donations wisely. Unfortunately, there are others that spend much of your contribution on fundraising and administrative expenses, and those who misrepresent themselves and solicit your money for phony causes. So it makes sense to investigate a charity before you make a donation. Consider taking the following precautions before you give.

Asking the right questions and obtaining certain information from the charity is the only way you can be sure your contribution will be used to benefit the causes and people you want to support.


So, you finally realize that the personal loan you made to a friend will not be repaid. Or your business made a credit sale to a customer who did not pay. Is there anything you can do to help recoup either loss? Yes! The IRS will let you take a tax deduction for both business and nonbusiness bad debts if you have properly set up the original transaction. Following their rules from the beginning will help assure a tax deduction later.

Generally, a business debt is created or acquired in connection with a trade or business. A nonbusiness debt is any debt other than a business debt. It is always better to have bad debts classified by the facts as business debts because they are deductible against ordinary income and only have to be partly worthless to take a deduction. Nonbusiness bad debts must be entirely worthless, and they are treated as short-term capital losses.

Here are some guidelines to follow to have your bad debt deduction meet IRS scrutiny.

Complete documentation is the key to getting your rightful tax deduction.

Kamlesh H. Patel, CPA, can be reached at (813) 949-8889 or e-mail [email protected] or [email protected]


Why You Need Auto Insurance

By Adi Khorsandian

Each year, more cars and drivers hit the highways. With so many vehicles on the road, crashes will happen. Automobile insurance can be the difference between a minor inconvenience and a major hassle. But why do you need insurance and just how much should you buy?

Auto insurance protects you by paying for damage or injury you cause others while driving your car, damage to your car or injury to you or your passengers in your car from a crash, plus certain other occurrences, such as theft. Auto insurance is required by law in all states and provinces. Without insurance, you risk having to pay the full cost of any harm you cause others or of repairing or replacing your car if it is damaged or stolen.

Coverage requirements vary by state/province but usually include the following:

Liability: It pays for damages due to bodily injury and property damage to others for which you are responsible. Bodily injury damages include medical expenses, lost wages and pain and suffering. Property damage includes damaged property and loss of use of property. If you are sued, it also pays your defense and court costs. State laws usually mandate minimum amounts, but higher amounts are available and usually recommended.

Personal injury protection: This is required in some states and is optional in others. It pays you or your passengers for medical treatment resulting from a crash, regardless of who may have been at fault, and is often called no-fault coverage. It may also pay for lost earnings, replacement of services and funeral expenses. State law usually sets minimum amounts.

Medical payments: This coverage is available in non-no-fault states; it pays regardless of who may have been at fault. It pays for an insured person’s reasonable and necessary medical and funeral expenses for bodily injury from a crash.

Collision: This pays for damage to your car caused by collision.

Comprehensive: This applies if your car is stolen or damaged by causes other than collision, including fire, wind, hail, flood or vandalism.

Uninsured motorist: This pays damages when an insured person is injured in a crash caused by another person who does not have liability insurance or by a person who cannot be identified (usually a hit-and-run driver).

Underinsured motorist: This pays damages when an insured person is injured in a crash caused by another person who does not have enough liability insurance to cover the full amount of the damages.

Other coverage, such as emergency road service and car rental is also available.

What you pay for auto insurance will vary by company and will depend on several factors, including:

Many people think of auto insurance as a necessary evil, but it can save your financial well-being. Evaluate your needs, do your research and with the help of your insurance agent make the decision that best suits you.

Adi Khorsandian, a State Farm agent providing insurance and financial services, can be reached at (813) 991-4111 or visit www.adikinsurance.com

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