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Any day that a property is rented to a family member for less than fair market rent is considered a day of personal use, so in this situation you would have 100% personal use and no rental property for tax purposes. The otherwise allowable deductions for real estate tax and mortgage interest would b...

Is this $20k/$40k deduction for using IRA withdrawals for living expenses only? Or it would also apply to Roth conversions? Victoria I THINK yes, $20K/$40K of a Roth conversion would be excluded. But I could not find a definitive answer from an authoritative source. Only some links to general infor...

I think it's a mistake to view Berkshire as just an insurance company. Buffett doesn't view it that way. He views the collections of companies that Berkshire owns as comprising 4 separate businesses, of which insurance is one. The other 3 non-insurance "businesses" in 2012 had pre-tax earn...

jared, I believe the answers are: Scenario 1 - Yes, an IRA contribution (Roth or traditional) would be allowed; Scenario 2 - No, an IRA contribution would be disallowed. For limitations on IRA contributions, Publication 590 defines "compensation" for self-employed individuals as the net ea...

Your citation doesn't cite the exceptions, and I don't have the statute and regulations at my elbow, but if capital gains aren't carried out with principal distributions in estates and trusts, then a lot of major corporate fiduciaries are preparing their 1041's incorrectly. Are you sure you're not ...

Thanks, Mark, but I still don't think this answers the question. When principal of a trust is invaded for the beneficiary & there are capital gains in the trust this carries the gain out to the beneficiary. Likewise, when distributions are made from an estate and there are capital gains in the ...

You're the expert and it's been a few years since I've administered an estate, but I don't read it that way. The statute you cited says DNI does not include capital gains except if they are "paid, credited, or required to be distributed to any beneficiary during the taxable year..." It se...

If the husband and wife are the only owners of the business and both materially particpate in the business activity, they can avoid filing a partnership tax return by electing to treat the activity as a Qualified Joint Venture. They make the election by filing a joint 1040 and each filing a Schedul...

If the husband and wife are the only owners of the business and both materially particpate in the business activity, they can avoid filing a partnership tax return by electing to treat the activity as a Qualified Joint Venture. They make the election by filing a joint 1040 and each filing a Schedule...

I would suspect that the accountant filed for an extension with a payment, instead of a second e-filing. Why have you not called the accountant to ask what he did? That would have been my first move. Sit on the phone or go down to his physical office until you get some answers. Yes that's what he h...

There is another possibility. Some taxpayers have college-age children, who, while away at school, decide they want to prepare their own tax return, and they mistakenly claim an exemption for themselves when they are legitimately a dependent of their parents. If the child files first, the parents' r...

It's likely that prorating the first year's distribution amount would only be permitted if the taxpayer elects to take the SEPP distributions in the form of 60 monthly payments. Or maybe it would be 61 months? It would be a good idea to obtain a private letter ruling in advance before using this opt...

You need to file individual returns for the kids. A return reporting income from the trust will include Sched E page 2 identifying the trust as the source of the income. I disagree. Leaving aside the issue of any foreign tax credits, there is no reason a parent cannot file Form 8814 in this situati...

You need to file individual returns for the kids. A return reporting income from the trust will include Sched E page 2 identifying the trust as the source of the income. I disagree. Leaving aside the issue of any foreign tax credits, there is no reason a parent cannot file Form 8814 in this situati...

This is from the IRS Pub 550 page 70 middle column, second paragraph: "When you figure the amount of any capital loss carryover to the next year, you must take the current year's allowable deduction into account, whether or not you claimed it and whether or not you filed a return for the curre...

I am definitely filing on time and am going to visit with accountant on options. The amount I have due on April 15 is 5 figures but I will be able to pay over half maybe 3/4 of it on time. The remainder I should be able to pay in May or June. You have two practical options and either one should wor...

All I do is match what the 1099 says. I get a 1099 from TDAmeritrade that says "First Clearing" is the payor, so I put First Clearing on the tax form. Actually, TurboTax puts FirstClearing on the tax form. Many brokerage account 1099s show a clearing agent as the payer, such as First Clea...

I think you're asking 2 different questions. One, does Iowa allow passive activity losses, and two, how to enter nonresident passive activity income and losses in Turbotax. I can't answer the second, but as to the first, not all states allow passive losses, but Iowa does. As a Wisconsin resident, if...

There are 3 different ways to move funds from one retirement fund to another without tax or penalty: 1. ROLLOVER. When the taxpayer receives an IRA or qualified plan distribution check and re-deposits the distribution amount into another IRA or qualified plan within 60 days. 2. DIRECT ROLLOVER/TRANS...

A general principle in the tax law is that you can't deduct an expense which is the obligation of another and which you have no obligation to pay. If it were otherwise, you would have the person in the highest tax bracket make the payment for the greatest tax benefit. The IRC doesn't work that way....

It is difficult to know which method of filing is best without knowing the actual amount of income and deductions for each spouse, but I would suggest you consider doing this: since you're both WI domiciled residents, file a joint federal return and joint WI return. If you're certain she is a statut...

How soon can you amend? First year using a CPA. He made a mistake not including the state tax refund from form 1099-G, filed last night. $60 or so, so will probably result in $15 taxes. I'll check with him first of course. Pros make mistakes too.. be forewarned. The first year I use a CPA is the fi...

I had a somewhat similar situation a few years ago, when I forgot to wait for a K-1. When it came I filed a 1040X, just so that I could file the 8582 and use the passive loss carryover in later years. But the 1040X was very boring, with no changes anywhere. There are several numbers on a tax form t...

There are several numbers on a tax form that carryover from year to year -- capital losses on Schedule D, passive losses on 8582, IRA basis on 8606, and others. Does the IRS really check the number I report this year against the number I reported last year? I don't really want to find out. Without ...

In the above case, might it not have made sense, on line 21, to report "$1x,xxx 1099-Misc Reported on Sch D", with a $0 in the amount column. Might have saved the inquiry. Yes, it would have made sense and may very well have prevented the IRS inquiry. The method Gus used worked out for hi...

The unfiled income tax returns will most certainly be an issue. I strongly urge you to have your step-daughter not attempt to handle this on her own, but consult a CPA or tax attorney who has familiarity with the IRS voluntary disclosure program. The potential penalties in this situation can be sign...

From the information provided, I think there's a good chance the settlement proceeds will qualify for long-term capital gain treatment as a casualty gain, but the amount, tax treatment and correct reporting of the proceeds will depend on a number of factors, including whether a casualty loss was cla...

I don't believe it is possible for the sum of the two state incomes on the w2 to exceed the total income in your example. In your example the w2 would show $65000 of total state income .... not possible if the total earned was only $60000. ... So my post indicates the w2 in this example should be c...

Another question about all this: If the ESOP withdrawal check that generated the 1099-R was received less than 60 days ago, then I think we still have a chance to add the amount to a rollover IRA, right? Or is it the date on the check that one has to go by? And a non-direct rollover that spans 2 ta...

livesoft, Separation from service is synonymous with termination of employment. Separation from service does not occur if the employee contiunued working the same job with a different employer resulting from a corporate transaction, such as a sale or merger. So if she didn't remain on the job with t...

Nothing is clear. I recently moved and was confronted with a list of events like has been posted from some states. Trouble was that all of the events occurred at different times as I went through the move process. I would imagine this is typical for most people. Registering to vote is not a priorit...

Nothing is clear. I recently moved and was confronted with a list of events like has been posted from some states. Trouble was that all of the events occurred at different times as I went through the move process. I would imagine this is typical for most people. Registering to vote is not a priorit...

I did some projections and it looks like I will owe about $5,000 of AMT for 2012. I am using the standard deduction. 33% bracket federal, 4.2% state. Vast majority of my income is from wages... I have 5 exemptions and I am thinking that is what is getting me hit with AMT. Other than giving away a c...

Based on the information provided, you should NOT be filing an AZ tax return for 2012. Prior to 2012, Iowa was your domicile. In Jan 2012 you left temporarily for AZ, with the intent to return to Iowa, which you did 5 months later. Iowa remains your domicile and permanent residence and you should be...

If the payer refuses to issue a corrected 1099, your primary concern should be preparing your tax return properly knowing that the IRS will receive incorrect information. In this situation, I suggest you list the 1099 nonemployee compensation amount on line 21 of your 1040, along with the name and ...

If the payer refuses to issue a corrected 1099, your primary concern should be preparing your tax return properly knowing that the IRS will receive incorrect information. In this situation, I suggest you list the 1099 nonemployee compensation amount on line 21 of your 1040, along with the name and t...

Without any tax paid, a $200 underpayment penalty on $10,000 total tax sounds about right. If a late 4th quarter payment is mailed today, it might reduce the penalty by 20%-25%. However, a payment mailed today that was due Jan 15th will be more than 2 weeks late. When a tax payment is mailed after t...

You often want to amend because the penalties the IRS assesses if they do the numbers are often a big chunk higher. The math on this all gets pretty tedious but basically the only penalty you really need to watch out for is the 5% per month penalty that gets assessed the first five months. That pro...

I am familiar with the requirement to combine all IRA totals for traditional IRA's to determine the total amount from which the RMD is taken... What is confusing is that the form calls for entering totals at the end of 2012. It has been my assumption that the RMD for 2012 would be based on IRA tota...

From my point of view, a processed check proving that IRS has accepted your payment is all you need. Processing the check is IRS's responsibility. If they accepted your check, but do not process it, it is their fault. Once they accept your check, your end of the deal has ended. I will partially dis...

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If I was in that situation, I would not use zero basis since the actual basis, however small, should be greater than zero. I would try to obtain a copy of whatever documents the other receiver of the gift has that were used to arrive at an estimate of $5K, plus anything else that would be helpful in...

We don't have state income taxes nor mortgage interest deduction which are the usual AMT culprits, so I think we are good to go. Since mortgage interest on acquisition debt is deductible for both regular tax and AMT, it is not an AMT "culprit." The most common culprits are individual exem...

If the AMT is allowed to remain as is (meaning no patch for 2012), my additional taxes due to AMT will be $7,800 this year. If they were to allow the state sales tax deduction in 2012 (this expired after 2011), my additional taxes due to AMT would be $9,700 this year. :annoyed Andy, Are you sure yo...

It's likely the other schedules printed because something on them changed. For example if your AGI changed it would change the threshold amounts for medical and miscellaneous. A change to capital gains on Schedule D can cause a change to Schedule A due to a change in AGI, but it cannot cause a chan...

The IRS will not allow you the option of arbitrarily deciding in which year income is taxed. Under the "constructive receipt" doctrine, income is taxable in the year the payment is received without restriction on its use, not in the year the check is deposited.

Since you turn 70.5 during 2013, 2013 is your first required distribution year. You can take the 2013 Required Minimum Distribution anytime during calendar year 2013, or during 2014 no later than April 1, 2014. Waiting to take the 2013 distribution in 2014 means you will have to take both 2013 and 2...

I use subjective analysis when to buy and sell. I am sure out of 20 replies, 1 might be helpful. That is all I need. The bottom line question is, where is the market likely headed in the next month? The answer is - no one knows. Any answer you receive from anyone on this forum or anywhere else whic...

If you change your domicile from CA to AZ, then the CA house becomes a 2nd residence/vacation home. Any capital loss carryovers from prior years can be used to offset current or future year capital gains, including gains from the sale of a rental property or principal residence. The principal reside...

Regardless of the correct amount to repay, you may be able to take advantage on your 2012 tax return through a claim of right. , "Claim of right" does not apply in this case, for several reasons: 1. When the bonus was received, it was understood that one additional year of service was req...