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Re: What would you do with 1.25 million dollars for 1 year?

With incomes over $1M some of the safe harbors do not apply, e.g. in California no safe harbor amount... Thanks for this - I am going to look into. Was with tax accountant on Tuesday and he assured me that as long as we follow safe harbor, we will be fine. If there is state income tax due, then jus...
by MarkNYC
Thu Mar 26, 2015 5:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: What would you do with 1.25 million dollars for 1 year?
Replies: 39
Views: 3471

Re: Best tools to understand the AMT?

.................................. Yes, as I noted before, my AMT marginal tax rate would have been 53.8% in 2014. ............................ Do you understand why it is that high? I was under the impression that it should be the basic 26/28% rates increased by 25% (for the exemption phaseout) so...
by MarkNYC
Tue Mar 24, 2015 12:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Best tools to understand the AMT?
Replies: 14
Views: 1299

Re: Received Confusing IRS Letter

Here's my theory. Something in the IRS computers was looking for Form 1116 to substantiate the foreign tax credit on the tax return, and in the absence of Form 1116, the credit was reduced to zero, causing a potential credit carryover. Then the computer recognized that no Form 1116 was needed since ...
by MarkNYC
Fri Mar 20, 2015 3:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Received Confusing IRS Letter
Replies: 8
Views: 1355

Re: Better to file taxes separately if married?

What about when saving tax deferred, or in a roth. Spouse one makes $350k, spouse two makes $60k, Spouse two is saving at the tax deferred max, $22,500. and looking to put more money away tax deferred or at least let it grow tax free). Would it make sense to MFS, qualifying spouse two to at least p...
by MarkNYC
Tue Mar 17, 2015 9:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Better to file taxes separately if married?
Replies: 23
Views: 2218

Re: Distribution of RMD when trust is Inherited IRA benefici

Reported on line 5 of the K-1, as "Other portfolio and nonbusiness income."
by MarkNYC
Tue Mar 17, 2015 9:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Distribution of RMD when trust is Inherited IRA beneficiary
Replies: 3
Views: 458

Re: Rental properties

For those who own rental properties jointly with their spouse, I'm curious how many (if any?) report the income and expenses properly on Federal Schedule E. A rental property owned jointly by spouses is considered by the IRS to be a partnership requiring the filing of partnership tax return Form 106...
by MarkNYC
Fri Mar 13, 2015 12:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Rental properties
Replies: 25
Views: 2882

Re: How do I calculate depreciation/basis for rental?

If a certain amount of depreciation was "allowable" during the rental years, say $75K, and zero depreciation was taken, the adjusted basis for calculating gain or loss will include a reduction for the $75K depreciation allowable. However, assuming the taxpayer has records to show no deprec...
by MarkNYC
Thu Mar 12, 2015 6:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: How do I calculate depreciation/basis for rental?
Replies: 35
Views: 1614

Re: S. Corp Salary Amount and Retirement Contributions

--> I understand I do not have to pay interest to the IRS on taxes that are owed if I get an extension- is that correct? <-- That is incorrect. You will have to pay interest and a Failure to Pay penalty on any amount you owe. Currently he effective interest rate (sum of FTP penalty and interest) is...
by MarkNYC
Thu Mar 05, 2015 9:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: S. Corp Salary Amount and Retirement Contributions
Replies: 41
Views: 2538

Re: How are Carry forward Capital Losses handled in Divorce?

See page 38 of pub 544 Joint and separate returns. On a joint return, the capital gains and losses of spouses are figured as the gains and losses of an individual. If you are married and filing a separate return, your yearly capital loss deduction is limited to $1,500. Neither you nor your spouse c...
by MarkNYC
Thu Mar 05, 2015 6:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: How are Carry forward Capital Losses handled in Divorce?
Replies: 10
Views: 444

Re: Rapid amending of tax return

We once got hit with a penalty for amending the return after April 15th when we owed additional taxes. It was due to a late arriving 1099 for merchandise received for contests won at work by my wife. It wasn't a lot of money, but they still hit us with a penalty. In a situation like that, where you...
by MarkNYC
Thu Mar 05, 2015 4:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Rapid amending of tax return
Replies: 14
Views: 755

Re: Step-up in basis for inherited assets - Question

For stocks and bonds, the FMV on the date of death is the mean between the highest and lowest selling price quoted on the valuation date (usually day of death). For a mutual fund, where only the closing price is available, the FMV is the mean between the closing price on the valuation date and on th...
by MarkNYC
Wed Mar 04, 2015 4:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: Step-up in basis for inherited assets - Question
Replies: 8
Views: 627

Re: Estate - Stepped-Up Value of House

The rules are set up so that you do not benefit from both the step up in basis AND the full 500k exclusion. Should you pass first, the basis is stepped up to DOD value (lets assume 800k) which will leave little gain, but the exclusion for your spouse is 250k, not 500k. Essentially, both spouses mus...
by MarkNYC
Wed Mar 04, 2015 1:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Estate - Stepped-Up Value of House
Replies: 6
Views: 644

Re: NYC Taxes (NYC-208) credit for Real Prop. Tax Credit

From what I've read, only about 4% of NYC properties are totally exempt from real estate tax, so almost all tenants will meet this qualification item. The credit ranges from zero to $500. However, as Grabiner noted, meeting all eligibility requirements does not automatically mean you will receive th...
by MarkNYC
Mon Mar 02, 2015 2:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: NYC Taxes (NYC-208) credit for Real Prop. Tax Credit
Replies: 9
Views: 912

Re: Long-term gain (or loss) held less than a year?

Here's the likely explanation: Under IRC Sec 852(b)(4), if a shareholder purchases mutual fund shares, and receives a capital gain dividend (reinvested) and then sells the shares at a loss within six months after purchasing the shares, the loss is treated as a long-term loss to the extent of the ca...
by MarkNYC
Sat Feb 28, 2015 9:55 am
 
Forum: Personal Finance (Not Investing)
Topic: Long-term gain (or loss) held less than a year?
Replies: 17
Views: 924

Re: Long-term gain (or loss) held less than a year?

Is it possible that she had some additional shares of the same fund that were purchased earlier, and it was actually those shares that were sold- as in first in first out? Then those first shares would have been a long term loss. She hadn't owned anything with Vanguard previously, and all the share...
by MarkNYC
Fri Feb 27, 2015 5:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: Long-term gain (or loss) held less than a year?
Replies: 17
Views: 924

Re: Preventing IRS Fraud

the IRS would be crazy to give a filer a 4 (or more) figure estimated tax credit that was not reported on the return. Glenn Why do you believe the IRS would be crazy to correct estimated tax information on a tax return and adjust the amount of refund or taxes owed? What should the IRS do if they de...
by MarkNYC
Wed Feb 25, 2015 2:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: [Protection against fraudulent IRS tax returns]
Replies: 39
Views: 1730

Re: Preventing IRS Fraud

If you paid estimated taxes and forget to include them, the IRS will add those to your return (and increase your refund or lower your balance due) Really! Do you have any personal experience in this regard? I seriously doubt that the IRS would do this for a large estimated tax balance, especially i...
by MarkNYC
Wed Feb 25, 2015 1:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: [Protection against fraudulent IRS tax returns]
Replies: 39
Views: 1730

Re: Taking RMD this year

There are penalties if RMDs aren't taken in the year required, but my rough understanding is that the IRS will waive them given a reasonable explanation and request. So when someone passes away, it takes time to settle the estate. I would think quite often an inheritor of an RMD obligation would mi...
by MarkNYC
Tue Feb 24, 2015 3:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Taking RMD this year
Replies: 13
Views: 960

Re: Pay the IRS now for shares sold in 1st quarter of 2015?

If you owe more than $1000 to the federal government at the end of the year, they will penalize you for not making quarterly estimated payments. The only exception to this is if the the 2015 tax year your total tax already paid exceeded your total due for 2014 (even if you owe more than $1000 on yo...
by MarkNYC
Sat Feb 21, 2015 8:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Pay the IRS now for shares sold in 1st quarter of 2015?
Replies: 12
Views: 657

Re: NY 529 - Withdrawing/Contributing Same Year - Tax Deduct

Grt2bOutdoors wrote:
Do you have earned income of $5,000 or more in NYS during 2015? If yes, and you make a contribution to your NYS 529 plan you may take the deduction.

Unlike IRAs, there is no earned income requirement for making contributions to a NY 529 plan, or for taking the deduction.
by MarkNYC
Thu Feb 19, 2015 9:47 am
 
Forum: Investing - Help with Personal Investments
Topic: NY 529 - Withdrawing/Contributing Same Year - Tax Deduction?
Replies: 4
Views: 361

Re: Define: participate in a retirement plan at work

Thanks for all the input. Right now I am waiting to see if I hear back from the employer. Without a clear answer I will probably go the conservative route. However, for arguments sake, how would the IRS know whether my wife had access to a workplace retirement plan if her W-2 had nothing in listed ...
by MarkNYC
Wed Feb 18, 2015 4:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Define: participate in a retirement plan at work
Replies: 43
Views: 2366

Re: Define: participate in a retirement plan at work

I believe if she is eligible to participate in a 401(k) whether or not she chooses to participate, Box 13 should be checked yes. yes +1 - see page 28 of link below . http://www.irs.gov/pub/irs-pdf/iw2w3.pdf Take another look at the instructions on the chart on page 28 of the link you provided. In t...
by MarkNYC
Wed Feb 18, 2015 11:27 am
 
Forum: Personal Finance (Not Investing)
Topic: Define: participate in a retirement plan at work
Replies: 43
Views: 2366

Re: Define: participate in a retirement plan at work

I don't understand the question. You’re covered by an employer retirement plan for a tax year if your employer (or your spouse’s employer) has a: * Defined contribution plan (profit-sharing, 401(k), ... Taking out extraneous words: You are covered by an employer retirement plan if your employer has...
by MarkNYC
Tue Feb 17, 2015 5:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Define: participate in a retirement plan at work
Replies: 43
Views: 2366

Re: Making a substantial donation

I have no problem justifying the value of the books. They are going to a very respected public institution that has accepted the collection, not just the individual volumes. L. If the appraised value of the book collection exceeds $5,000, then page two of Form 8283 (which must be attached to the ta...
by MarkNYC
Tue Feb 17, 2015 4:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: Making a substantial donation
Replies: 11
Views: 572

Re: Forgot to take RMD.. now what?

Alan S. wrote:I think we can conclude that a waiver request will very often be granted...

Alan,

You say "will very often be granted." Are you aware of any specific case(s) where the Form 5329 waiver request was denied? If so, did the IRS give a reason for the denial?
by MarkNYC
Thu Feb 12, 2015 2:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Forgot to take RMD.. now what?
Replies: 27
Views: 2860

Re: Forgot to take RMD.. now what?

My spouse moved an inherited IRA and forgot to setup the RMD. It was a similar amount. It was very simple to do an extra distribution and we filed the 5329 (this took about 5 minutes). Simple fix. The waiver was granted. I have filed a few waivers for TaxAide clients. All were accepted. Just curiou...
by MarkNYC
Wed Feb 11, 2015 8:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Forgot to take RMD.. now what?
Replies: 27
Views: 2860

Re: Fully Depreciated Rental Condo - Question

The IRS will not tell you over the phone how much depreciation was taken, and a tax transcript is not likely to show this information. You will probably need to request a copy of the actual tax return (including all forms schedules) for one or more years. The particular form needed is Form 4562. Th...
by MarkNYC
Tue Feb 10, 2015 5:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: Fully Depreciated Rental Condo - Question
Replies: 31
Views: 1510

Re: Fully Depreciated Rental Condo - Question

The IRS will not tell you over the phone how much depreciation was taken, and a tax transcript is not likely to show this information. You will probably need to request a copy of the actual tax return (including all forms schedules) for one or more years. The particular form needed is Form 4562. The...
by MarkNYC
Tue Feb 10, 2015 3:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Fully Depreciated Rental Condo - Question
Replies: 31
Views: 1510

Re: Does the IRS object to summarization of W2-G forms?

Summarizing should not be a problem. On line 21 of form 1040 write "gambling winnings" and list the $79 income. Show the $19 tax withholding on page 2. If you paper-file, you must attach form W2-G if it shows federal withholding.
by MarkNYC
Sun Feb 08, 2015 10:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Does the IRS object to summarization of W2-G forms?
Replies: 7
Views: 761

Re: Successful investing: Is it luck or skill?

For a few it may be luck, or skill. But for most investors I think it's primarily from wisdom - the wisdom gained from both experience and accumulated investing knowledge.

(wisdom: Insightful understanding of what is true, right, or enduring )
by MarkNYC
Thu Feb 05, 2015 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: Successful investing: Is it luck or skill?
Replies: 26
Views: 2662

Re: Penalty for failure to file gift tax returns?

Bogleheads: Situation: * A single U.S. citizen dies in 2014 with a 2 million dollar estate. * Deceased gave $100,000 annually to one person during the prior 10 years (1 million dollars). * Deceased did not file any gift tax returns. * What is the penalty (if any)? Thank you and best wishes. Taylor ...
by MarkNYC
Sat Jan 31, 2015 4:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Penalty for failure to file gift tax returns?
Replies: 4
Views: 1044

Re: Age limit on IRA deduction

So the key here is the 5 year rule. You can pull money out of a Roth IRA completely tax-free if you're over age 59.5 and it's been at least 5 years since your first Roth contribution. If they're just starting their first Roth accounts now, then they can't pull the money out for the next 5 years wit...
by MarkNYC
Wed Jan 28, 2015 8:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: Age limit on IRA deduction
Replies: 24
Views: 1377

Re: AMT............Total Tax Same w/ Std. Deduction/Itemize

Then why are you paying AMT? Take a look at your Form 6251 and see which other deductions you are losing, and to make sure that your tax software filled out the forms correctly. CA state taxes are high, but it's rare for state taxes alone to cause you to pay AMT, unless you paid an unusually large ...
by MarkNYC
Wed Jan 28, 2015 3:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: AMT............Total Tax Same w/ Std. Deduction/Itemize
Replies: 11
Views: 1239

Re: Some RMD Questions

Born 11/23/1945. Questions... [list=1] [*]I MUST take RMDs starting 2017, right? That is the year AFTER I turn 70.5. (70 in late 2015 so 70.5 in 2016.) [*]Is it better to start in 2016 so as not to "double dip" in 2017, pushing me up a tax bracket and/or increasing taxes on SS? If I DON'T...
by MarkNYC
Sun Jan 25, 2015 4:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Some RMD Questions
Replies: 28
Views: 1564

Re: rental property depreciation

. Also check with your tax advisor about whether placing your personal residence into rental service is going to force you to bifurcate your cap gains between personal residence and rental property. There was a rule change effective January 1, 2009. Related to the principal residence exclusion, pla...
by MarkNYC
Wed Jan 14, 2015 9:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: rental property depreciation
Replies: 25
Views: 1926

Re: rental property depreciation

. Also check with your tax advisor about whether placing your personal residence into rental service is going to force you to bifurcate your cap gains between personal residence and rental property. There was a rule change effective January 1, 2009. Related to the principal residence exclusion, pla...
by MarkNYC
Wed Jan 14, 2015 2:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: rental property depreciation
Replies: 25
Views: 1926

Re: rental property depreciation

burt, Regardless of whether or not you sell this property within the next 3 years, I believe a portion of the gain attributed to depreciation taken or depreciation that could have been taken during the period of the time the property was a rental property will be recaptured as a taxable gain. It is...
by MarkNYC
Wed Jan 14, 2015 12:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: rental property depreciation
Replies: 25
Views: 1926

Re: Help with my 1041 and Schedule K-1

If the trust is the sole IRA beneficiary, by what authority is Vanguard making IRA distributions to someone other than the trust? As trustee, perhaps you assigned the trust's interest in the IRA income to yourself as sole beneficiary of the trust?
by MarkNYC
Thu Jan 01, 2015 9:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help with my 1041 and Schedule K-1
Replies: 3
Views: 400

Re: A Big Birthday? [IRA Catch-up Contributions]

As mentioned, the catch-up contribution can be made any time during the calendar year in which the individual turns age 50. Similarly, the 10% penalty for early distributions from qualified plans does not apply if the distribution takes place after the employee separates from service, and the separa...
by MarkNYC
Thu Jan 01, 2015 9:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: A Big Birthday? [IRA Catch-up Contributions]
Replies: 4
Views: 677

Re: Help with my 1041 and Schedule K-1

When a trust is named as the IRA beneficiary, the RMDs get paid to the trust and are either accumulated or distributed to the trust beneficiary, depending on the terms of the trust. If the trust meets certain requirements, the age of the trust beneficiary can be used to calculate the RMD. On Form 10...
by MarkNYC
Thu Jan 01, 2015 8:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help with my 1041 and Schedule K-1
Replies: 3
Views: 400

Re: Salary Reduction Simplified Employee Pensions (SARSEPs)

If I understand correctly, you are currently an employee rather than self-employed. If that's the case, then you cannot set up your own SEP (Simplified Employee Pension plan). A SEP can only be set up by an employer: a corporation, LLC, LLP, or sole proprietorship. Once in place, all eligible employ...
by MarkNYC
Mon Dec 29, 2014 4:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: Salary Reduction Simplified Employee Pensions (SARSEPs)
Replies: 3
Views: 429

Re: Roth conversion -estimated tax Q

I'm in NY, if anyone has good info to know before filing Form IT-2105 to pay est NY tax for a 4th Q Roth conversion(?) If you are over age 59.5, you are entitled to a $20K annual pension income exclusion on your NY tax return, which includes income from IRA conversions. If you still need to pay a N...
by MarkNYC
Mon Dec 22, 2014 7:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth conversion -estimated tax Q
Replies: 14
Views: 1562

Re: State tax deducation & AMT

Epsilon Delta and Mule have given good explanations above. In some AMT situations, where the correct taxable refund is more than zero but less than the full refund, in order to get the correct refund amount it may be necessary to go back into the prior year return and, through trial and error, deter...
by MarkNYC
Sat Dec 20, 2014 1:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: State tax deducation & AMT
Replies: 32
Views: 3471

Re: State tax deducation & AMT

...as I explained when I recalculated my 2012 tax and reduced my state tax deductions by $25000 (state income tax of $28000 not deducted, state sales tax deducted, $3000) to a total state tax deduction of $15000 versus $40000, my tax went up $1. So, the $2000 recovery amount produced a $1 tax benef...
by MarkNYC
Fri Dec 19, 2014 1:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: State tax deducation & AMT
Replies: 32
Views: 3471

Re: State tax deducation & AMT

It is worse if you get tax refunds. At least under TT, the way they calculate the tax benefit rule if you save $1 of tax because of a state tax deduction, you have to take any state tax refund into income the next year. So, in year one, if you get overwithheld $2000 of income taxes, your tax rate o...
by MarkNYC
Wed Dec 17, 2014 8:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: State tax deducation & AMT
Replies: 32
Views: 3471

Re: Tax Question: How Does the 3.8% Kick In?

I understand there's a new 3.8% (since 2013) tax on single filers with income over $200,000 and joint filers over $250,000. Does that mean the first $200,000/250,000 does not incour that tax - only the amount beyond it? That's correct. You pay the 3.8% tax on the lesser of (1) your "net invest...
by MarkNYC
Tue Dec 16, 2014 7:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax Question: How Does the 3.8% Kick In?
Replies: 4
Views: 716

Re: How to contribute rental income to an IRA

Hi All - I'm trying to settle a debate. Someone I know, who owns several rental properties, is claiming he operates the properties thru an LLC. and therefore is eligible to contribute to a SEP-IRA. Can someone who only earns rental income operate the properties under their own LLC and qualify for a...
by MarkNYC
Fri Dec 12, 2014 5:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to contribute rental income to an IRA
Replies: 2
Views: 422

Re: IRS Form 5498 - IRA Contribution Info

Tom, I believe the answer may involve the following: 1. An IRA custodian must file Form 5498 WITH THE IRS by May 31 of the succeeding year, to report an IRA contribution and the IRA's year end value. 2. An IRA custodian must send TO AN IRA OWNER by January 31 of the succeeding year a statement of th...
by MarkNYC
Sun Dec 07, 2014 3:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: IRS Form 5498 - IRA Contribution Info
Replies: 3
Views: 384

Re: Question about "5 year" Roth holding period for conversi

Could you give your reasoning for believing a Jan 1, 2018 distribution would meet the 5-year holding period for a conversion made in 2014?
by MarkNYC
Fri Dec 05, 2014 10:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Question about "5 year" Roth holding period for conversions
Replies: 3
Views: 498

Re: IRS looking for money, my CPA just died….

Claiming you KNOW the amount was paid, but don't remember how it was paid or have any bank account evidence of payment, is just not convincing. Calling or writing the IRS or calling your accountant without evidence of payment is likely a waste of time. With many millions of checks being sent to the ...
by MarkNYC
Wed Dec 03, 2014 1:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRS looking for money, my CPA just died….
Replies: 8
Views: 2098
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