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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: 21
Views: 1014

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: 1857

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: 1857

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: 1857

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: 327

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: 659

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: 327

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: 415

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: 1493

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: 3334

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: 3334

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: 3334

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: 708

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: 411

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: 360

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: 490

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: 2088

Re: [Poll] What's Your Tax Prep Strategy?

I do it by hand, and file schedules A, B, D, H, Forms 6251 (AMT), 2441 (dependent care credit), 8606, 8959 (extra medicare tax on wages), 8960 (extra medicare tax on investment income) and one or two more that I can't recall from memory right now. Dont know where that puts us on overall complexity....
by MarkNYC
Tue Dec 02, 2014 6:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: [Poll] What's Your Tax Prep Strategy?
Replies: 70
Views: 5020

Re: Tax deductions for donating a lot

A few things to note regarding taking a charitable deduction for used clothing and household goods that are worth less than the original cost: 1. Form 8283 is required if the deduction exceeds $500 for ALL items donated, not just "similar" items 2. The basis and holding period are essentia...
by MarkNYC
Mon Dec 01, 2014 5:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax deductions for donating a lot
Replies: 20
Views: 1441

Re: IRS CP14: Dishonored Payment Penalty?

I have two questions about the IRS notice CP14 (Notification of balance due) that I just got. 1) There is a $25.00 "Dishonored payment penalty." However, they have received, and recognize having received, all the money I sent in - exactly, to the penny. There is no missing payment. Any id...
by MarkNYC
Thu Nov 27, 2014 3:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRS CP14: Dishonored Payment Penalty?
Replies: 10
Views: 1387

Re: Daughter Owes 2013 Taxes-Any Advice?

MarkNYC, Please note my comment near the top of the posts that the IRS does not normally send CP2000 letters until late spring of the year following the due date of the return. Tom, A CP2000 notice is sent by the IRS when the income and/or withholding amounts in their records do not match the amoun...
by MarkNYC
Tue Nov 18, 2014 1:31 pm
 
Forum: Personal Consumer Issues
Topic: Daughter Owes 2013 Taxes-Any Advice?
Replies: 21
Views: 4933

Re: Daughter Owes 2013 Taxes-Any Advice?

I agree with Dulocracy's comments, and would add the following: If she filed in April, she most certainly has already received delinquent tax notices from IRS and the state. Some people choose not to open and read these letters until reality sets in. If she went on extension and filed in October she...
by MarkNYC
Tue Nov 18, 2014 11:25 am
 
Forum: Personal Consumer Issues
Topic: Daughter Owes 2013 Taxes-Any Advice?
Replies: 21
Views: 4933

Re: Ouch! IRS penalty for underpayment, Any ideas?

I don't understand the "Failure to Pay Penalty". ..Were your taxes not paid by the 4/15 deadline? It's clear that total taxes were not paid by 4/15, or he would not have owed any interest when he filed his tax return. Here's what probably happened. Both the S Corp and his personal tax ret...
by MarkNYC
Wed Nov 12, 2014 9:36 am
 
Forum: Personal Finance (Not Investing)
Topic: Ouch! IRS penalty for underpayment, Any ideas?
Replies: 24
Views: 3218

Re: Ouch! IRS penalty for underpayment, Any ideas?

There is a provision in the IRS regulations for something called a "First Time Abatement" (FTA), where if a taxpayer contacts the IRS to explain that this is the first time s/he has made a particular mistake that resulted in a penalty, the IRS has the discretion to grant a waiver if they ...
by MarkNYC
Tue Nov 11, 2014 10:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Ouch! IRS penalty for underpayment, Any ideas?
Replies: 24
Views: 3218

Re: IRS letter claiming return is late - anyone experience t

I'll close my loop (a few posts above) too as I'm at the MIL's house today looking at her latest CP2000 that resulted from my response to the first one in August. In that response I sent a revised Schedule D and forms 8949 and 1099-D documenting her mutual fund sale that had not been reported by he...
by MarkNYC
Wed Oct 29, 2014 3:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRS letter claiming return is late - anyone experience this?
Replies: 51
Views: 7333

Re: First RMD Question

Appreciate the responses but upon reviewing this further with my Vanguard rep who also reviewed it with the IRA department they insist the distribution must be all in one year or all in the next year before April. The window for taking RMDs is the 12-month calendar year, except for the first year's...
by MarkNYC
Thu Oct 16, 2014 9:07 am
 
Forum: Personal Finance (Not Investing)
Topic: First RMD Question
Replies: 10
Views: 1066

Re: Now what? - Lost check to IRS

Back in September I mailed estimated tax payments to the IRS and to my state (MA) DOR. I sent them both by certified mail (that's where the post office puts a tracking number on each letter). I do this every quarter using pre-printed envelopes to minimize any risk of getting the address wrong. A fe...
by MarkNYC
Mon Oct 13, 2014 9:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Now what? - Lost check to IRS
Replies: 9
Views: 1200

Re: First RMD Question

In fact, the first RMD year is a one time opportunity to split your RMD in such a way that the combined tax liability for both years is optimized. I saved several hundred dollars in my first year by taking 65% of my RMD in the first year and deferred the other 35% to early in the next year. Usually...
by MarkNYC
Mon Oct 13, 2014 8:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: First RMD Question
Replies: 10
Views: 1066

Re: First RMD Question

I turned 70 1/2 in 2014 and my first RMD if taken this year will result in a MAGI slightly over 170k and thus an increase in medicare part b premium down the road. I asked my rep at vanguard if I could take most of the RMD in 2014 and the remainder in 2015 before april. His response was that I eith...
by MarkNYC
Mon Oct 13, 2014 7:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: First RMD Question
Replies: 10
Views: 1066

Re: Taxes on Over Priced Prize?

I took 2nd place in a charity poker tournament. I won a signed sports memorabilia poster which was advertised by the charity to be worth $1,000. It's numbered and there are something like 200 signed prints in existence. I checked on eBay and I found one listed there not selling for $150. It had the...
by MarkNYC
Tue Oct 07, 2014 7:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Taxes on Over Priced Prize?
Replies: 10
Views: 1828

Re: How to Contact IRS to suspend tax levy on paycheck

I am going to disagree with the last 2 posts although I understand the need for "children" to learn lessons and take responsibility. And I expect to be loudly criticized by some. I always told my now 28-year old daughter that if she did something highly illegal or was in serious trouble, ...
by MarkNYC
Fri Sep 19, 2014 4:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to Contact IRS to suspend tax levy on paycheck
Replies: 25
Views: 1899

Re: How to Contact IRS to suspend tax levy on paycheck

This is a difficult situation. I agree with spectec's comments and suggestions. A couple other comments, assuming the taxpayer filed returns every year (maybe a big assumption), and without meaning to be too harsh: 1. Taxes are never withheld from "freelance" payments. Most people know whe...
by MarkNYC
Fri Sep 19, 2014 1:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to Contact IRS to suspend tax levy on paycheck
Replies: 25
Views: 1899

Re: Tax on house sell in trust

Assuming the house is the only trust asset, and the potential gain is $50k, if the house is transferred to the two beneficiaries and they sell it, each individual would receive half the net proceeds from sale and each would pick up $25K long term capital gain on their respective individual tax retur...
by MarkNYC
Fri Sep 05, 2014 1:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax on house sell in trust
Replies: 7
Views: 1140

Re: taxes on rental property sale

Two more questions: 1) If the FMV basis was lower and I have a net gain, at what rate is the gain taxed? 2) What do I do about the 12 K in repair costs? 1) FMV, if lower, is used to calculate a loss. Original cost is used to calculate a gain. You should discuss this issue with your accountant. If t...
by MarkNYC
Fri Aug 15, 2014 9:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: taxes on rental property sale
Replies: 8
Views: 914

Re: taxes on rental property sale

A few points: 1. The $21K sales commission is not an ordinary rental income/expense deduction on Schedule E. Instead, it is a selling expense which reduces your gain or increases your loss on the sale. 2. As mentioned, the basis for calculating a loss on a personal residence converted to a rental is...
by MarkNYC
Fri Aug 15, 2014 11:59 am
 
Forum: Personal Finance (Not Investing)
Topic: taxes on rental property sale
Replies: 8
Views: 914

Re: Sale of House

Because it was sold rather promptly, the best indication of date of death value is the sale price. As a result the proceeds equal the basis and no gain or loss. Gill When sold shortly after death, I would agree that adjusted basis would be equal to the selling price. But the sale almost always incl...
by MarkNYC
Wed Aug 13, 2014 6:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: Sale of House [Taxes on sale of inherited house]
Replies: 5
Views: 593

Re: Fed Taxes on Sale of Rental/Primary Residence

Assuming you sold in April 2013, and it became a rental unit after April 2010, and you lived in it at least until April 2010...then you meet the "2 of 5 years" criterion. So that only leaves the depreciation. If you claimed rental income on your tax return that you could have also claimed...
by MarkNYC
Wed Aug 13, 2014 8:36 am
 
Forum: Personal Finance (Not Investing)
Topic: Fed Taxes on Sale of Rental/Primary Residence
Replies: 12
Views: 1018

Re: Estate Trustee requests I "waive presentation of account

Unless you or one of the other beneficiaries has reason to doubt the correctness of the amounts you are receiving, I would suggest signing the waiver. A formal fiduciary accounting has the potential to be very expensive, depending on the size, complexity, activity, and duration of the estate or trust.
by MarkNYC
Thu Jul 24, 2014 3:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: Estate Trustee requests I "waive presentation of accounting"
Replies: 10
Views: 1593

Re: CPA Help - Estimated taxes and Self-Employment taxes

I am an S-Corp and this is how I handle my estimated taxes and come in with safe harbor every year. When the penalties are calculated for underpayment, you can "annualize" your income. The payroll withholding is considered to be received evenly through out the year (which it was) and your...
by MarkNYC
Fri Jun 13, 2014 9:47 am
 
Forum: Personal Finance (Not Investing)
Topic: CPA Help - Estimated taxes and Self-Employment taxes
Replies: 9
Views: 810

Re: Can a dead woman take her RMD?

The cold reality that is being ignored by everyone is that you cant put toothpaste back in the tube. There is no way under the tax law to return the IRA distribution to the deceased's IRA and then have the beneficiary take the distribution as an MRD. Not everyone is ignoring that reality. I don't t...
by MarkNYC
Thu Jun 05, 2014 8:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can a dead woman take her RMD?
Replies: 47
Views: 3505

Re: Can a dead woman take her RMD?

So, anyone have an opinion on what VG will do once they understand what happened here? Alan, Here's my guess. Vanguard won't change anything, especially since the POA, executor, and beneficiary are the same person. Vanguard did nothing wrong. They made a distribution based on a POA they had on file...
by MarkNYC
Wed Jun 04, 2014 8:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can a dead woman take her RMD?
Replies: 47
Views: 3505

Re: Can a dead woman take her RMD?

Since RMD was received after death it is income of the estate. The RMD is income in respect of a decedent. It can be transferred to the IRA beneficiary (son) by the estate and the estate will deduct the RMD from its taxable income and the beneficiary will include it as taxable income. Since the son...
by MarkNYC
Wed Jun 04, 2014 4:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can a dead woman take her RMD?
Replies: 47
Views: 3505

Re: Can a dead woman take her RMD?

I highly doubt there is criminal liability here. Who was defrauded? The estate of which he is the sole beneficiary? And what was the fraud? The money was moved from one account to another. I would agree regarding any criminal issue, but there is a reasonable chance that the transaction, if not corr...
by MarkNYC
Tue Jun 03, 2014 4:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can a dead woman take her RMD?
Replies: 47
Views: 3505

Re: Can a dead woman take her RMD?

Spirit rider, Thank you, thank you. As I read what you pasted from the IRS, I/we understand the the RMD in the year of death must be taken on the owner's life expectancy that year (the divisor is decided the second the new year begins). And that if the IRA was properly transferred to the beneficiar...
by MarkNYC
Tue Jun 03, 2014 1:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can a dead woman take her RMD?
Replies: 47
Views: 3505

Re: AMT Planning Strategies

And if any of your AMT is due to timing issues (such as accelerated depreciation or stock options), the exemption for your child may increase the amount of AMT credit you get in a future year. It won't change the tax bill this year because the AMT does not allow exemptions, but it will increase the...
by MarkNYC
Thu May 22, 2014 10:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: AMT Planning Strategies
Replies: 13
Views: 1399

Re: AMT Planning Strategies

And if any of your AMT is due to timing issues (such as accelerated depreciation or stock options), the exemption for your child may increase the amount of AMT credit you get in a future year. It won't change the tax bill this year because the AMT does not allow exemptions, but it will increase the...
by MarkNYC
Thu May 22, 2014 9:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: AMT Planning Strategies
Replies: 13
Views: 1399

Re: AMT Planning Strategies

If your wife is pregnant, tell her not have the child until the subsequent year. .. I could not get my daughter to be born until January 1 and instead, I had her on December 31, 2013 which tipped me into AMT. Funny thing is that everyone at the hospital was inducing on December 31 to take advantage...
by MarkNYC
Thu May 22, 2014 12:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: AMT Planning Strategies
Replies: 13
Views: 1399

Re: Death of Spouse

It has long been my understanding that, by naming my spouse as designated beneficiary of my traditional IRA account, when I pass the account becomes hers. For discussion purposes assume no age difference here (late 70s), both spouses taking RMDs from their own account, and RMDs have already been ta...
by MarkNYC
Thu May 15, 2014 3:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: Death of Spouse
Replies: 5
Views: 1240

Re: mailed US tax check 4/13 - not cashed yet

So my check was cashed end of april, but i receive a notice from the IRS today stating that I owe the money How do i straighten this out? What sort of delay in crediting? the letter is quite firm that i owe money I think there are two likely possibilities. The first would be that you did not legibl...
by MarkNYC
Sun May 04, 2014 9:32 am
 
Forum: Personal Finance (Not Investing)
Topic: mailed US tax check 4/13 - not cashed yet
Replies: 43
Views: 7429

Re: IRS letter claiming return is late - anyone experience t

Since no one has asked this question, I will. What kind of a return is due on Jan 15? Probably not a 1040 type and not a estimated payment either. Perhaps a 1041 estate return with a different calendar year? Most likely a fiscal year foundation return, Form 990. Only one I know of with a $20/day la...
by MarkNYC
Sat Mar 29, 2014 11:38 am
 
Forum: Personal Finance (Not Investing)
Topic: IRS letter claiming return is late - anyone experience this?
Replies: 51
Views: 7333
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