The Sanatoga Post

SANATOGA PA – Natural disasters hit Lower Pottsgrove (PA) Township pretty hard during 2011. Heavy rains turned Sanatoga Creek, Sprogel’s Run, and the Schuylkill River into raging torrents. Much of what was in the water’s path was flooded and damaged. Properties here weren’t the only ones hit, of course: hurricanes soaked other parts of the Atlantic coast, tornadoes wreaked havoc in Southern and Midwestern states, and wildfires hit Texas

Traffic cones warn drivers away from flooded North Sanatoga Road last September

If you were affected by a natural disaster last year, the Pennsylvania Institute of Certified Public Accountants thinks you should be aware of Internal Revenue Service rules on casualty losses, as well as other financial considerations.

What Qualifies for a Deduction?

Under IRS rules, you are allowed to deduct a casualty loss that is the result of a disaster, but related rules serve to significantly whittle down the amount you can deduct.

First, consider what is eligible for the deduction. A casualty loss is the damage, destruction, or loss of property resulting from an identifiable event that is unexpected, sudden, or unusual. Damages from natural disasters – hurricanes, floods, wildfires, and earthquakes, for examples – are casualty losses. Damage to your home or other property caused by something that is not unexpected, sudden, or unusual, such as accidental breakage of items under normal conditions, progressive deterioration occurring naturally over time or due to the failure to maintain the property, does not qualify as a casualty loss.

If you suffered a casualty loss to your home, household goods, or vehicle due to a disaster, you should be eligible to deduct the amount of that loss on your tax return, less required adjustments. (The same is true if you suffer a loss due to a theft.)

How Does the Deduction Work?

According to the IRS, “If your property is personal-use property, or is not completely destroyed, the amount of your casualty or theft loss is the lesser of: The adjusted basis of your property, or the decrease in the fair market value (FMV) as a result of the casualty or theft.”

To determine your adjusted basis, start with the basis of the property. Your basis in the property is usually how much it cost you. Increase or decrease the property’s basis to reflect any improvements made to the property or depreciation deductions you have taken for the property.

The decrease in the FMV used to determine the casualty loss is the difference between the FMV of the property immediately before the casualty and the FMV of the property immediately after the casualty. The FMV immediately after the casualty frequently is the salvage value of the property. From the lesser of the adjusted basis of the property or the difference in its FMV, subtract any insurance payment or other reimbursement (such as compensation for the loss from a government or employer relief program). This is your casualty loss.

For example, say flooding heavily damaged a finished basement during a recent hurricane. Several items were destroyed by water damage—a washer and dryer, hot water heater, furnace, some furnishing, the basement walls. The basis in these items—what originally was spent on them—amounts to $10,000. The fair market value of these items was $9,500 before the disaster and $500 after, making the decrease in the FMV $9,000. Because the decrease in the FMV of the items is less than the adjusted basis in them, you must use the decrease in the FMV in your loss calculation. Your insurance covers you for a maximum of $5,000 in damages, leaving you with a $4,000 casualty loss.

Final Steps in the Calculation of the Deduction

Before deducting personal property casualty loss on your tax return, there are some last steps you must take. First, you must subtract $100 from every casualty or theft loss you report each year. That lowers the example amount to $3,900.

More significant, you must subtract 10 percent of your adjusted gross income from the loss amount to arrive at your final deduction. If your adjusted gross income was, $30,000 last year, you would subtract $3,000—10 percent—from your loss amount to arrive at $900 as your allowable deduction. If your adjusted gross income in the example was $39,000 or higher, that 10 percent would wipe out your allowable deduction altogether.

Other Sources of Help

For those seeking additional relief, it’s important to be aware that organizations such as the Federal Emergency Management Agency (FEMA) often provide funds and services to those affected by disaster. The agency’s guide, “Help After a Disaster,” offers an overview of what’s available. In addition, “Disaster Recovery: A Guide to Financial Issues” – a joint project of the American Institute of CPAs, the American Red Cross, and the National Endowment for Financial Education – answers questions on how to minimize the consequences in the first days, weeks and months after a disaster.

Contact A Certified Public Accountant

If you have experienced casualty losses due to a disaster, or if you have questions on preparing for or dealing with any financial issue, consult a local CPA. He or she can provide advice to help address a range of financial concerns.

Friendly's, 203 Shoemaker Rd., Pottstown PA

SANATOGA PA – Staff members at Meals On Wheels in Sanatoga hope you’ll hop into your own wheels Feb. 13 (2012; Monday) and cruise over to the west side of Pottstown for a meal that will give the program some financial assistance.

Friendly’s Restaurant, at the corner of Route 100 and Shoemaker Road, will hold a fund-raiser that day from 5-8 p.m. to benefit Family Services of Montgomery County and, specifically, its effort to bring two meals daily to shut-ins and elderly in the greater Pottstown area. Friendly’s is donating 10 percent of its proceeds during the period, for both dine-in and take-out items, to Meals On Wheels.

• This event has been added to The Post calendar.

Ruth Hood, director of the meals program located at 1976 E. High St., claimed it has “a long history of ensuring the nutritional well-being of elderly individuals … and has helped many seniors lead happy, healthy and independent lives.”

Each weekday, according to Hood, Family Services provides two meals – a hot lunch and a cold supper to refrigerate – to an average of 175 home-bound elderly and disabled individuals in Pottstown, Royersford and the Lower Perkiomen Valley. Community volunteers personally deliver more than 81,000 meals a year.

“Thanks to the community’s ongoing support of our fund-raising efforts, we are able to serve (those) who turn to our program for assistance,” Hood said.

Photo from Yahoo Images

SANATOGA PA – It’s tax time … again … and with it comes the annual call for volunteers to join Family Services of Montgomery County (PA) and the Internal Revenue Service in providing free income tax preparation assistance from the Family Services office at 1976 E. High St., Sanatoga.

The help is need for the agency’s Volunteer Income Tax Assistance (VITA) program. VITA-trained volunteers assist low- to middle-income individuals and families in the preparation and electronic filing of simple income tax forms.

There are many ways to help at VITA, said Kathy Cael, the program’s site coordinator. They “can complete and file tax forms, greet clients, organize paperwork, and assist with other administrative tasks,” she said.

Volunteer tax preparers receive free instruction and training to become certified IRS tax preparers. Volunteer greeters, who should be friendly and customer service-oriented, welcome clients and assist Cael with administrative tasks.

No experience is necessary. All volunteers must be age 18 or older, computer literate, and able to commit to one 4-hour volunteer shift per week for the 13-week tax season. Early afternoon, evening and weekend volunteer shifts are available at two VITA sites in greater Pottstown. For more information, call Cael at 610-326-1610, Ext. 222.

Photo from Squidoo.com

Derek Menaldino, left, and Brian Hess at Thursday's economic forecast breakfast

LIMERICK PA – One regional economist believes manufacturing jobs are poised to return to the U.S. because global financial events have made it more expensive for competing nations to export goods, local business owners and leaders learned Thursday (Jan. 5, 2012) during an economic forecast breakfast in Limerick PA.

Brian Hess, senior research analyst at Brandywine Global Investment Management, told guests at the TriCounty Area Chamber of Commerce forum that rising wage costs in China combined with rising oil costs worldwide had narrowed the price gap between it, other countries and the U.S. in the race to sell durable consumer goods like appliances. The possibility for renewed competitiveness could spur manufacturing growth here, he said.

Hess and Derek Menaldino, chief investment officer of Main Line Financial Advisors in Pottstown PA, were featured panelists during an hour-long discussion of the coming year in business and finance, held at the Copperfield Inn at Lakeside.

Both focused their comments in reaction to results of a recent client poll undertaken by Main Line, in which its clients said they felt better about improvements in their own personal finances during 2011 even though they believed the global economy simultaneously worsened.

“Consumers look at the prices of things they buy, and feel better when cash is freed up in their own pocketbooks,” Menaldino said. Oil and food prices are major factors in personal expenses, he noted, and in the year just ended both were comparatively lower than those in 2009 and 2010. In that light, he added, “the global issues sort of fade away.”

Media reports on financial turmoil in Portugal, Italy, Greece and Spain certainly attracted public attention, Hess acknowledged. He said he was nonetheless “excited by prospects outside the U.S.,” where several governments with “very stable” economies were promoting investment opportunities with lower risk.

Other predictions from the pair:

• The pump price of gasoline is likely to hover between $3 and $3.50 for much of 2012;
• National economic growth will be somewhere between 2 and 2.5 percent for the year;
• Marcellus shale oil drilling will again have a significantly positive financial effect on Pennsylvania this year, and for several more years as well; and
• Job creation will be slight, and unemployment will remain high nationally, because the U.S. is still reeling in the “long hangover period” that follows a recession.

Watch a video (above) of comments made during the breakfast, or see it at The Post’s YouTube channel.

Diamond Credit Union representatives Paul Schwab, left, and Lori Levengood talk with a student after their presentation this month

POTTSTOWN PA – Pottstown High School students are getting real-life financial help from some local experts.

Representatives of Diamond Credit Union, which has its headquarters on Medical Drive in Lower Pottsgrove (PA) Township, are continuing a series of four high school visits each semester to offer their knowledge and professional experience as part of the students’ Personal Finance classes.

A Dec. 7 (2011) presentation titled “Credit, Credit Scores, and Not Paying” was the latest activity in the partnership between Diamond and the Pottstown School District, district Community Relations Director John Armato said. It featured Lori Levengood, Diamond’s vice president of lending, and Debt Counseling Manager Paul Schwab. They answered questions about the value of a good credit score and the repercussions of not repaying debts.

“Knowing how to balance your personal finances is a life skill that is even more important in current economic conditions. We’re happy to illustrate the real life applications of what the students are learning in class, and feel privileged to be able to add to the depth of their understanding of personal finance topics,” said Todd Rothenberger, Diamond vice president of marketing.

During previous visits, representatives discussed “Budgeting,” “How a Financial Institution Works,” and “The Difference Between Banks and Credit Unions.” Diamond is also scheduled to visit the class in January to discuss protection from identity theft.

Diamond is the 18th largest credit union in Pennsylvania. It has two additional offices in Reading, and holds more than $372 million in assets for more than 40,000 members.

Photo from Diamond Credit Union

NORRISTOWN PA – Residential foreclosures nationally seem poised to rise again, according to Reuters News Service. It said banks moved more aggressively in the third quarter of 2011 and the number of new home foreclosures jumped by more than 21 percent over the previous three-month period.

Things may be slightly better, though, for some home owners in Lower Pottsgrove (PA) Township and elsewhere locally who expected to face foreclosure this week.

Seven of nine foreclosure sales of properties within the township, which were scheduled for disposition Wednesday (Dec. 28, 2012) in Norristown by Montgomery County (PA) Sheriff Eileen Whalon Behr, have been stayed, interrupted by bankruptcy filings, or otherwise postponed to later dates.

Those often are signs of lenders trying to work with owners to keep them in their homes, but they may also be due to holiday generosity.

• Postponed until at least Jan. 25 (2012) were proposed sales of 1383 Oakdale Dr., 772 Gabriel Ct., 3808 Walnut Ridge Estates, and 1612 N. Keim St.
• Postponed until Feb. 29 were proposed sales of 2807 Walnut Ridge Estates, and 2303 Walnut Ridge Estates.
• The proposed sale of 1560 Potter Dr. was stayed.
• The proposed sale of 1912 N. Charlotte St. is uncertain; the sheriff’s website has it marked as “Postponed to 12/28/2011;” and the listing of 19 Pebble Beach Ln. is marked as “For Sale 12/28/2011.”

The combined properties represent a total of more than $1.8 million in outstanding debt, according to the website.

Similarly, proposed sales of six properties in Limerick Township all were postponed, the sheriff reported; and of 34 properties scheduled for proposed sale in the borough of Pottstown, 30 were postponed or stayed.

Reuters, in its Dec. 21 (2011) story, noted that “in the final months of 2010 some big lenders, including Bank of America Corp. and Wells Fargo, suspended foreclosure proceedings as they responded to criticism over shoddy paperwork used to support foreclosures.” Those reviews have now been completed, Reuters added, and so the pace of foreclosures is again “picking up.”

It cited an Office of the Comptroller of the Currency report that claimed “the large increase in new foreclosures also occurred because banks have ‘exhausted alternatives to foreclosure for the large inventory of seriously delinquent mortgages working through’ the system.”

Photo from Google Images

SANATOGA PA – Preliminary hearings are scheduled Wednesday (Nov. 23, 2011) for three suspects arrested by Lower Pottsgrove police, who allege they were connected to more than 15 residential burglaries or thefts that are said to have occurred “over the past several months” in the township, as well as in four other Montgomery County municipalities and two in Chester County.

Lower Pottsgrove's police station at Buchert and North Pleasant View roads.

Facing multiple charges are Jason Waldt and Jennifer Lewis, both of Pottstown PA, and Megan McCormick of Gilbertsville PA, police said. All are being charged with numerous counts of burglary, criminal conspiracy, theft, receiving stolen property, criminal trespass, criminal mischief, and dealing in illegal proceeds, among others.

The hearings are set to be conducted before Magisterial District Justice Edward Kropp Sr. in Sanatoga.

A Lower Pottsgrove department report said plenty of investigative work by a task force of law enforcement agencies, including the State Police and police in New Hanover, Upper Pottsgrove, Limerick, East Coventry and North Coventry townships and Pottstown borough, helped uncover evidence that led to the suspects.

Members of the same task force previously arrested Waldt and McCormick following what police allege were two burglaries that occurred Oct. 31 and Nov. 4 in Lower Pottsgrove. Charges initially lodged in those incidents were withdrawn, department Lt. Michael Foltz said, and incorporated with the other cases being investigated.

The “impromptu” task force formed, according to Foltz, after police in the several jurisdictions began comparing notes on burglaries they were checking. All seemed to involve “a common scheme and design,” he said; most of the incidents, for example, were alleged to have occurred during daytime hours, he added.  Following the arrests, investigators recovered stolen property from several victims’ homes in the suspects’ possession. Foltz credited the arrests to “outstanding police work on behalf of those involved.”

ONE FOR THE BOOKS – For the 11th consecutive year, Diamond Credit Union, with offices on Medical Drive in Lower Pottsgrove (PA) Township, on Friday (Nov. 18, 2011) announced that every one of its 107 employees had participated in this year’s regional United Way fund-raising campaign. The event was marked with a cake by employees Kim Deery, left, and Deb Maskrey. Donations were made either through weekly payroll contributions or a one-time payment. Employee donations combined with Diamond’s corporate pledge totaled a record-breaking $30,130.36, it said. Diamond Credit Union is the 18th largest credit union in Pennsylvania.

EAGLEVILLE PA — To help meet transportation needs of low-to-moderate income individuals in western Montgomery County and across the region, Family Services has partnered with the Family Auto Group of Greater Philadelphia to offer loans for used car purchases or repairs, even to those with poor or limited credit histories.

Once all required documents are submitted, Family Services spokeswoman Karen Konnick said Friday (Nov. 11, 2011), participants can sign and take delivery of their car within a few days. The loan program, called “Keys to Success,” also offers family budget and car maintenance counseling that helps clients stay on track throughout the process she said.

Keys to Success not only provides vehicles and affordable financing options, but also gives clients service contracts and insurance products that make car repairs manageable and supplies peace of mind. “Individuals and families with limited resources will now have the means to achieve greater self-sufficiency through car ownership and reliable transportation,” added Family Services Director Mark Lieberman.

Family Services operates an office on East High Street in Sanatoga.

Persons interested in obtaining a Keys to Success loan should call Family Auto Group of Greater Philadelphia Manager Brian Somerman, 610-630-2111 Ext. 263, for an initial consultation. Qualified borrowers must:

• Be a resident of Philadelphia, Montgomery, Chester, Bucks, or Delaware counties;
• Have a valid driver’s license;
• Be insurable;
• Have a source of income; and
• Have a minimum down payment of $500.

When their credit application is completed, applicants will select a reliable used vehicle from the Family Auto Group’s inventory, as well as a service contract and insurance products that fit their needs and budget. A range of affordable financing options is available. All vehicles come with a 21-point mechanical inspection and a 90-day powertrain warranty.

Photo from Google Images