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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 12:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRS letter claiming return is late - anyone experience this?
Replies: 34
Views: 3404

Re: When does depreciating a rental property save on taxes?

Since the rules for passive activities and tax on rental real estate are complicated, there is much confusion, even among tax professionals. Certain technical terms are often used incorrectly, which adds to the confusion. A few related comments: 1. When a rental property is sold, any prior year unal...
by MarkNYC
Sun Mar 23, 2014 9:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: When does depreciating a rental property save on taxes?
Replies: 70
Views: 4187

Re: Residency Tax Question

Box 15 is NY. I've looked at IRS Pub 17. Does it address this situation? I didn't spend any time during the entire tax year in either New York or New Jersey. IRS Publication 17 deals with federal income tax, which is not relevant to your issue of whether your income is subject to tax by one or more...
by MarkNYC
Fri Mar 21, 2014 1:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: Residency Tax Question
Replies: 20
Views: 946

Re: Residency Tax Question

Where is the income sourced in Box 15 on your W2? I think technically you owe taxes to DC as a non-resident. You probably owe taxes to NJ as a resident as well but they should give you a credit for most if not all of the taxes you may pay to DC. DC does not tax nonresidents. Not wanting to violate ...
by MarkNYC
Thu Mar 20, 2014 10:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Residency Tax Question
Replies: 20
Views: 946

Re: Any way to avoid large state tax refund?

However you probably are in the AMT and you can lose the entire benefit of the deduction. And amazingly, despite that situation for me in 2013 (I paid AMT in 2012 and received a state tax refund in 2013) Turbotax and my calculations concluded that the refund was fully taxable. Although it's possibl...
by MarkNYC
Tue Mar 18, 2014 9:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Any way to avoid large state tax refund?
Replies: 13
Views: 1413

Re: Using Life Expectancy Tables for RMD

Minimum Required Distribution means the same thing as Required Minimum Distribution. At least, I can't parse the difference. ... For many years, most people called it minimun required distributions, or MRDs. I still generally call it that. However, the regulations (which were issued about a dozen y...
by MarkNYC
Tue Mar 18, 2014 9:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Using Life Expectancy Tables for RMD
Replies: 22
Views: 1417

Re: 401K Required Minimum Distribution Question

I think it's best to take the first distribution before December 31, 2014, then take another one before April 1, 2015. I don't understand why this is good. You are splitting the 2014 RMD into these two parts. Then you need to take the 2015 RMD too before December 31, 2015. ...I'm taking my first RM...
by MarkNYC
Fri Mar 14, 2014 3:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401K Required Minimum Distribution Question
Replies: 10
Views: 760

Re: Need Help! New law firm partner taxes

Any responses to my actual questions though? Like Dale said, maybe I'll run for Senate one day and reduce everyone's taxes :greedy I can't help you with Turbo Tax input, but if you're preparing the return yourself, here are some things to know: 1. Your K-1 income is 100% taxable to your resident st...
by MarkNYC
Thu Mar 13, 2014 1:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Need Help! New law firm partner taxes
Replies: 11
Views: 829

Re: Trusts and Personal Income Tax Question

I am helping out a sibling with a tax issue. Unfortunately we lost a parent in 2012. After their death we each received an inheritance. The inheritance was received in 2 installments. One was a distribution from a TIRA and the other was from a 401k. My sibling is not great with money. Their first d...
by MarkNYC
Mon Mar 03, 2014 10:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: Trusts and Personal Income Tax Question
Replies: 12
Views: 529

Re: Real estate rental w Magi >150k

Thanks for the detailed explanation, marknyc. You really make it understandable. It sounds like good news, bad news. Good news: you can do the 250k exclusion repeatedly. Bad news: proportion of time as a rental diminishes the exclusion of gain. It almost makes sense as a "sweet spot" to s...
by MarkNYC
Thu Feb 27, 2014 9:41 am
 
Forum: Personal Finance (Not Investing)
Topic: Real estate rental w Magi >150k
Replies: 20
Views: 1838

Re: Real estate rental w Magi >150k

You do need to consider that you can avoid a lot of capital gains tax if you live in the condo for at least two years, then sell it in less than three more. (Up to $250K of the gain for a single taxpayer.) Also don't forget that if you rent it out, then when you sell you'll have to pay tax (current...
by MarkNYC
Wed Feb 26, 2014 10:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Real estate rental w Magi >150k
Replies: 20
Views: 1838

Re: Forgot to report 1099-R ?

If you rolled this all over then the tax didn't change, right? If it were me, I wold not file and amended return as no tax would be due and I would think you probably won't hear anything from IRS. If they send you a bill for zero, there is nothing to pay (they won't). If they audited this and the a...
by MarkNYC
Sun Feb 23, 2014 9:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Forgot to report 1099-R ?
Replies: 13
Views: 804

Re: Form 8606 Info

This year, as a first time Turbo Tax user, I prepared my return and entered the basis in the appropriate section. I did not make a contribution in 2013. The program would not generate an 8606 with my return and several calls to Turbo Tax yielded no help. Further research including deciphering the I...
by MarkNYC
Sun Feb 23, 2014 8:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: Form 8606 Info
Replies: 20
Views: 1144

Re: Form 8960 NIIT, real estate company

It's not that simple. The passive activity rules under Sec 469 will allow you to "group" 2 or more activities for the purpose of determining "material participation" in the activities, which determines whether each activity is treated as passive or nonpassive for income taxes. St...
by MarkNYC
Thu Feb 20, 2014 6:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: Form 8960 NIIT, real estate company
Replies: 9
Views: 388

Re: Do I need to file an amendment?

In most cases, regardless of filing status, when taxable income is less than $100K, the tax is based on the tax tables and not the tax rate schedules. ( excluding the reduced rate on qualified div & L/T gains) This means that income tax only increases when taxable income increases in increments ...
by MarkNYC
Tue Feb 18, 2014 2:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do I need to file an amendment?
Replies: 10
Views: 585

Re: When is the 10% early distribution fee due?

Mark, What apparently happened here is Option 1) - corrective distribution done before the tax due date. But rather than returning the contribution with earnings to the taxpayer and then having the taxpayer re submit the 2014 contribution, since it was already 2014 Vanguard consolidated the transac...
by MarkNYC
Mon Feb 17, 2014 10:45 am
 
Forum: Investing - Help with Personal Investments
Topic: When is the 10% early distribution fee due?
Replies: 27
Views: 1778

Re: Question about filing amended return

With rare exception, for any income tax not paid by 4/15 of the following year, interest will be assessed until the tax is paid. ... No penalty, but isn't there interest on the unpaid balance? Bruce I was assuming that there would be, but I just read this on page 4 of the Instructions for 1040X , wh...
by MarkNYC
Sun Feb 16, 2014 6:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: Question about filing amended return
Replies: 20
Views: 784

Re: When is the 10% early distribution fee due?

Alan, You may be right, but when the OP said "the excess contribution for 2013 was re-written as a 2014 contribution", it sounds like Method 3 was chosen and there was no "distribution" of the contribution, but perhaps Vanguard executed the transaction in a way that it met the re...
by MarkNYC
Sat Feb 15, 2014 3:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: When is the 10% early distribution fee due?
Replies: 27
Views: 1778

Re: Question about filing amended return

You filed, so no failure to file penalty. You are subject to a failure to pay penalty. Regarding the failure to pay penalty, I disagree. This penalty applies to unpaid tax that is "shown" on the original tax return. When an amended return is filed which shows additional tax due, the penal...
by MarkNYC
Sat Feb 15, 2014 2:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Question about filing amended return
Replies: 20
Views: 784

Re: When is the 10% early distribution fee due?

Indeed it is a mess. I have an account with Vanguard. I was told that the excess contribution can stay but that the earning had to be withdrawn. I asked about the 6% penalty and they said that since I fixed it before October 2014 (or at least before 2015 came over), I didn't have to pay any fees fo...
by MarkNYC
Sat Feb 15, 2014 1:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: When is the 10% early distribution fee due?
Replies: 27
Views: 1778

Re: When is the 10% early distribution fee due?

Sounds like a bit of a mess. Let's assume there was a 2013 IRA contribution of $5,000, which grew to $5,776. Since there was no earned income for 2013, the $5,000 is an excess contribution for that year. One of the 3 methods of correcting the excess contribution is to treat the previous year excess ...
by MarkNYC
Sat Feb 15, 2014 1:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: When is the 10% early distribution fee due?
Replies: 27
Views: 1778

Re: Missing tax forms for deceased relative

I kept her bank account open to receive this year's refund; I am joint on that account and will close it once this year's refund is processed. There may be a problem that you might want to discuss in advance with the bank. The federal tax refund check will likely be payable to "Estate of John ...
by MarkNYC
Thu Feb 13, 2014 9:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Missing tax forms for deceased relative
Replies: 12
Views: 668

Re: Missing tax forms for deceased relative

Outer Marker, Since a federal refund is expected, don't forget to either (1) file Form 1310 along with the Form 1040, or (2) attach to the 1040 a court certificate showing that you have been appointed personal representative for the estate. Without one of these, the IRS will not issue the refund to ...
by MarkNYC
Thu Feb 13, 2014 1:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: Missing tax forms for deceased relative
Replies: 12
Views: 668

Re: Jonathan Clements to return to WALL STREET JOURNAL SUNDA

Glad to see Clements is rejoining the Wall Street Journal. But when did the WSJ begin publishing on Sunday?
by MarkNYC
Tue Feb 11, 2014 10:15 am
 
Forum: Investing - Theory, News & General
Topic: Jonathan Clements to return to Wall Street Journal Sunday.
Replies: 29
Views: 3181

Re: Newly Married and Taxed

Kevin21 wrote:If one itemizes, the other must as well, and same holds true for standard deduction.

Since it doesn't matter which spouse files first, if the first part of the above sentence is correct (which it is), then the second part of the sentence cannot also be correct (which it isn't).
by MarkNYC
Mon Feb 10, 2014 10:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Newly Married and Taxed
Replies: 39
Views: 2341

Re: 1231 gains/losses

If you should have net Sec 1231 gains in a current year, you must treat the current year's 1231 gain as ordinary income (rather than capital gain) to the extent of the amount of any unrecaptured net 1231 losses for the prior 5 years.
by MarkNYC
Thu Feb 06, 2014 10:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: 1231 gains/losses
Replies: 2
Views: 448

Re: 709 Gift Tax Form Concern?

Something else worth noting for those filing gift tax returns: although gifts to charity are not subject to gift tax, the instructions to gift tax return Form 709 clearly state that if you're required to file a gift tax return, and you made charitable gifts during the year, you must include all of ...
by MarkNYC
Thu Feb 06, 2014 10:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: 709 Gift Tax Form Concern?
Replies: 12
Views: 544

Re: 709 Gift Tax Form Concern?

Something else worth noting for those filing gift tax returns: although gifts to charity are not subject to gift tax, the instructions to gift tax return Form 709 clearly state that if you're required to file a gift tax return, and you made charitable gifts during the year, you must include all of y...
by MarkNYC
Thu Feb 06, 2014 8:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: 709 Gift Tax Form Concern?
Replies: 12
Views: 544

Re: LLC interest income question

The passive activity rules can be complicated. Unless the dollars involved are nominal, for someone with investments in 2 or more non-publicly traded partnerships or LLCs, one of which is passive, and one or more of which may or may not be nonpassive, I would respectfully suggest that you do one of ...
by MarkNYC
Wed Feb 05, 2014 11:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: LLC interest income question
Replies: 1
Views: 194

Re: Do I need an accountant?

I have repeatedly said this so sorry to those people now thinking I'm a broken record... You should be able to use TurboTax if the K-1 is a page or two in length and only has a few numbers on it... and as long as the pass through entity isn't creating nexus for you in other states... Probably this ...
by MarkNYC
Wed Feb 05, 2014 4:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do I need an accountant?
Replies: 19
Views: 1163

Re: Does Principal Distribution from TRUST need to be report

In most cases, a "grantor trust" does not need to obtain its own federal tax id number. Instead, the grantor's SSN can be used on the financial accounts, in which case there is no need to file a trust income tax return Form 1041. Each item of income and expense just gets entered directly o...
by MarkNYC
Tue Feb 04, 2014 10:13 am
 
Forum: Investing - Help with Personal Investments
Topic: Does Principal Distribution from TRUST need to be reported?
Replies: 20
Views: 1287

Re: Does Principal Distribution from TRUST need to be report

With a "complex" trust, where the trustee has discretion to make distributions, the distribution of both income and principal gets reported on Form 1041, page 2, Schedule B, line 10. (assuming an income tax return is required to be filed)
by MarkNYC
Mon Feb 03, 2014 11:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does Principal Distribution from TRUST need to be reported?
Replies: 20
Views: 1287

Re: Deducting Tax preparation

The problem is the deduction goes on Sch A in an area that is subject to a 2% ceiling before you get a single penny, so unless you had other misc expenses that totaled 2% of your AGI, it would not show up in the result. Line 22 on the 2012 Sch A to be exact. fd Any reason you can't just deduct this...
by MarkNYC
Mon Feb 03, 2014 11:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Deducting Tax preparation
Replies: 14
Views: 634

Re: Deducting Tax preparation

The problem is the deduction goes on Sch A in an area that is subject to a 2% ceiling before you get a single penny, so unless you had other misc expenses that totaled 2% of your AGI, it would not show up in the result. Line 22 on the 2012 Sch A to be exact. fd Any reason you can't just deduct this...
by MarkNYC
Mon Feb 03, 2014 11:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: Deducting Tax preparation
Replies: 14
Views: 634

Re: Snow Bird Question [State Residency Requirements]

My understanding that to have state residency you have to live somewhere at least 6 months out of the year. Is this looked at closely? If someone has homes in the North East and Florida or California and Nevada, would the state with the high tax rate ever go after the person if they spent slightly ...
by MarkNYC
Thu Jan 30, 2014 9:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Snow Bird Question [State Residency Requirements]
Replies: 39
Views: 2510

Re: Nonresident NY tax return questions

My wife and I moved from NY to WA in Sep 2012. I have worked for a company based in WA since moving here. My wife worked Jan-Aug 2012 out of her company's office in NYC (she's an editor for a large nonprofit) and the rest of 2012 for the same company out of our home in WA. She worked all of 2013 fo...
by MarkNYC
Thu Jan 30, 2014 10:16 am
 
Forum: Personal Finance (Not Investing)
Topic: Nonresident NY tax return questions
Replies: 17
Views: 952

Re: tax question

In this type situation, if you're preparing your own tax return, I suggest that after the year the property ceases to be a rental activity you continue to file page one of Schedule E in future years. Next to the property address add the caption "not in service." List zero income and zero e...
by MarkNYC
Wed Jan 29, 2014 3:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: tax question [1040 schedule E and 8582]
Replies: 5
Views: 487

Re: tax question

Just to clarify, if I have only one rental property and take that out of service permanently (and have no other source for any passive income), then I would NOT be able to carry forward any unallowed loses from prior years -correct? Not correct. Prior year unallowed losses CAN be carried forward. I...
by MarkNYC
Wed Jan 29, 2014 12:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: tax question [1040 schedule E and 8582]
Replies: 5
Views: 487

Re: tax question

If the property is taken out of rental service, any unused passive losses from that activity can be carried forward indefinitely. The losses carried forward can be deducted in a future year: (1) to the extent of any passive income in that year, or (2) when there is a complete disposition (sale) of t...
by MarkNYC
Wed Jan 29, 2014 9:50 am
 
Forum: Personal Finance (Not Investing)
Topic: tax question [1040 schedule E and 8582]
Replies: 5
Views: 487

Re: Inheritance, Cap Gains Tax question

None of this is germane to my initial question of if/how to handle the capital loss associated with the sale of the house. The house was owned by the estate and sold by the estate. The sale should be reported by the accountant for the estate on the estate income tax return Form 1041. Since a benefi...
by MarkNYC
Tue Jan 28, 2014 2:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Inheritance, Cap Gains Tax question
Replies: 20
Views: 1361

Re: Can I claim mortgage deduction on my taxes in my situati

A property owner can only deduct mortgage interest to the extent he/she actually "makes the payment." If A mails the checks, and B reimburses A for half the amount, then each can deduct 50% of the interest. Who "makes the payment" is determined by whose funds are used, not who ma...
by MarkNYC
Fri Jan 24, 2014 10:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can I claim mortgage deduction on my taxes in my situation?
Replies: 8
Views: 860

Re: Can I claim mortgage deduction on my taxes in my situati

If a co-owner of a property makes mortgage payments, that owner can deduct the interest paid, even if not listed on the mortgage loan. The rationale being that a co-owner has an economic interest in making sure the mortgage gets paid. Reg 1.163-1
by MarkNYC
Fri Jan 24, 2014 9:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can I claim mortgage deduction on my taxes in my situation?
Replies: 8
Views: 860

Re: Tax reporting question: rental and the $250k exclusion

Synopsis: Got new job, moved to new state, rented old house for a year and then sold it. For the rental "business", had $20k in total losses (roofs and new siding adds up -- funny how these things happen after one moves out...), and a $20k capital gain with $10k of depreciation. So, I kno...
by MarkNYC
Mon Jan 13, 2014 6:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax reporting question: rental and the $250k exclusion
Replies: 3
Views: 418

Re: Non-cash donation cost basis question (lots of items)

If used merchandise with a FMV exceeding $500 is donated, then Form 8283 must be completed and included with the income tax return. If the merchandise was owned for more than one year, the instructions to the form clearly state to NOT list the cost basis on the form - just leave that line blank.
by MarkNYC
Fri Jan 03, 2014 8:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: Non-cash donation cost basis question (lots of items)
Replies: 13
Views: 908

Re: Trust fiscal year tax question

MarkNYC, Hi Mark. I realize that my initial posting was not particularly clear. But in looking at a number of sites with regard to the Section 645 exemption, one in particular, http://blogs.ssandg.com/tax/2011/11/29/treating-certain-revocable-trusts-as-part-of-an-estate/ states that if you make the...
by MarkNYC
Sun Dec 29, 2013 5:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Trust fiscal year tax question
Replies: 5
Views: 530

Re: End-of-year - capital gains confusion

I would disagree. First, if $250K is needed after tax, then more needs to be sold, probably around $290K. Second, if $145K is sold both this year and next year, then the new Net Investment Income Tax of 3.8% would not apply in either year. As I understand it, only the gain is taxable. If the divide...
by MarkNYC
Sun Dec 29, 2013 12:14 am
 
Forum: Investing - Help with Personal Investments
Topic: End-of-year - capital gains confusion
Replies: 27
Views: 1494

Re: Trust fiscal year tax question

Hello all, I am new to this forum and it looks like it is going to be very helpful for a lot of financial matters. I am wondering if there is anyone out there who can answer questions about some relatively basic tax issues. I am the successor trustee to my deceased parent's trust. It was a "ty...
by MarkNYC
Sat Dec 28, 2013 10:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Trust fiscal year tax question
Replies: 5
Views: 530

Re: End-of-year - capital gains confusion

you could sell 20K (assuming previous income/deduction info is correct) now and 230K next year or so do 125k each and it wouldn't make any difference on federal taxes. I would disagree. First, if $250K is needed after tax, then more needs to be sold, probably around $290K. Second, if $145K is sold ...
by MarkNYC
Sat Dec 28, 2013 8:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: End-of-year - capital gains confusion
Replies: 27
Views: 1494

Re: Executor of will -- dealing with investment portfolio

It's probably worth noting that after adjusting for any step-up in basis, any gain on the sale of inherited property by the estate or beneficiary is considered a long-term gain, regardless of how long the decedent owned the asset and regardless of how soon after death the sale takes place.
by MarkNYC
Tue Dec 24, 2013 10:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: Executor of will -- dealing with investment portfolio
Replies: 119
Views: 3346

Re: Did not withdraw enough taxes for 2013

I asked my friend who is a tax attorney about what she thinks I should do and here's what she said. What are your thoughts? You can alleviate the potential estimated tax penalty imposition in 1 of 2 ways: OR 2. File 2013 tax return ASAP. a. File a “skeletal” Form 1040, along with the additional tax...
by MarkNYC
Tue Dec 24, 2013 2:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Did not withdraw enough taxes for 2013
Replies: 35
Views: 1931
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