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Re: Can I deduct unreimbursed mileage from a S-Corp?

I work for an S-corp and receive a W2 from it. I also own 30% of the company and receive a 1120S K1 that has fairly significant earnings. I have to drive about 2000 miles per year for the company which is unreimbursed to me. It would not represent 2% of my AGI, but I am wondering if it can somehow ...
by jared
Sat Sep 27, 2014 3:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can I deduct unreimbursed mileage from a S-Corp?
Replies: 1
Views: 190

Re: Federal gift tax implications question

The retitling of the account was a gift. That's a totally separate issue than your question "does he still have to pay Federal Gift Taxes..." If gift taxes are due, they're due in the year of the gift. At death, it's no longer a gift tax question. The deceadants share of the account is in...
by jared
Sat Sep 27, 2014 12:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: Federal gift tax implications question
Replies: 6
Views: 519

Re: Tax liability on farm rental income

Generally speaking... If cash rent lease, report on Sch E (not subject to SE tax). If crop share lease with no material participation, report on Form 4835 (not subject to SE tax). If crop share lease with material participation, report on Sch F (subject to SE tax). See Pub 225 - Farmer's Tax Guide (...
by jared
Fri Sep 05, 2014 1:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax liability on farm rental income
Replies: 4
Views: 385

Re: LLC and an IRA

This is very unlikely to increase tax advantaged space. Rents from real estate are excluded from the definition of net earnings from self-employment.
by jared
Mon Aug 25, 2014 4:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: LLC and an IRA
Replies: 3
Views: 475

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 jared
Wed Aug 13, 2014 10:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: Fed Taxes on Sale of Rental/Primary Residence
Replies: 12
Views: 928

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 jared
Wed Aug 13, 2014 11:23 am
 
Forum: Personal Finance (Not Investing)
Topic: Fed Taxes on Sale of Rental/Primary Residence
Replies: 12
Views: 928

Re: How to Minimize Taxes: Family Selling Farm (Estate Plann

MN Finance wrote:Look, these are all really good ideas for taxes but the issue is whether or not this 70 year old couple wants to be in the farm business for the next 20 years. The assumption is that they do not.

Agree. Sounded to me like the decision to sell the land and residence has already been made.
by jared
Wed Aug 13, 2014 1:13 am
 
Forum: Personal Finance (Not Investing)
Topic: How to Minimize Taxes: Family Selling Farm (Estate Planning)
Replies: 21
Views: 1683

Re: How to Minimize Taxes: Family Selling Farm (Estate Plann

- Possible installment sale to spread the gain over multiple years and potentially minimize gain subject to 3.8% Net Investment Income Tax and 20% long-term capital gain rate. - Possible Section 121 exclusion of gain on sale of residence. "Possible" and "potentially" because we d...
by jared
Mon Aug 11, 2014 12:31 am
 
Forum: Personal Finance (Not Investing)
Topic: How to Minimize Taxes: Family Selling Farm (Estate Planning)
Replies: 21
Views: 1683

Re: SEP-IRA employer contributions fr/ personal account-prob

That was the first example that I found in my search. The facts in the Peek case are much different than the proposed solution in OP's scenario. In the Peek case, the disqualified person extended credit indirectly to an entity owned by the disqualified person's IRA. The language of section 4975(c)(1...
by jared
Thu Jul 24, 2014 10:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: SEP-IRA employer contributions fr/ personal account-problem?
Replies: 18
Views: 1418

Re: SEP-IRA employer contributions fr/ personal account-prob

Jared and Alan obviously did not look up examples of indirect prohibited transactions. Why don't you do that before debunking my take on it? The interpretation of indirect loan is fairly strict. For starters, the SUBSTANCE of the CPA's idea still leaves the principal involved in a loan with the pla...
by jared
Wed Jul 23, 2014 11:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: SEP-IRA employer contributions fr/ personal account-problem?
Replies: 18
Views: 1418

Re: SEP-IRA employer contributions fr/ personal account-prob

IRC 4975(c)(1)(B): ".....the term prohibited transaction means .....lending of money or other extension of credit........between a plan and a disqualified person." The disqualified person here is the S corp (or brian2013, not sure which way to go), who has been deemed to be in a loan rela...
by jared
Tue Jul 22, 2014 2:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: SEP-IRA employer contributions fr/ personal account-problem?
Replies: 18
Views: 1418

Re: SEP-IRA employer contributions fr/ personal account-prob

mah001 wrote:The CPA must be unaware of the concept 'indirect prohibited transaction,' which would make the entire ira immediately taxable. The good news is there would be no excise tax on the prohibited transaction.


Would you mind elaborating on this?
by jared
Tue Jul 22, 2014 2:10 am
 
Forum: Investing - Help with Personal Investments
Topic: SEP-IRA employer contributions fr/ personal account-problem?
Replies: 18
Views: 1418

Re: Multi-year payment is 529 qualified withdrawal?

IRC Section 529 is silent regarding the timing of distributions and education expenses. To my knowledge, there is nothing in the current law that says the distributions cannot be used for prior year expenses. That's not to say that the IRS wouldn't want to challenge this upon examination. However, I...
by jared
Fri Jul 18, 2014 11:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: Multi-year payment is 529 qualified withdrawal?
Replies: 14
Views: 839

Re: 529 Account & Non credit course

Thanks everyone for your help. I'm still confused on whether a noncredit course qualifies for funds from a 529 account. I'll keep looking into it and if I find a resource that may help I'll post it in a reply. What a kind group this is. I've been touched over the last X years with the generous help...
by jared
Wed May 28, 2014 11:35 am
 
Forum: Personal Finance (Not Investing)
Topic: 529 Account & Non credit course
Replies: 9
Views: 788

Re: 529 Account & Non credit course

I don't believe credit vs. noncredit matters for purposes of Section 529. See the definition of Qualified Higher Education Expenses in IRC Section 529(e)(3). http://www.law.cornell.edu/uscode/text/26/529 A very similar definition is in Proposed Reg 1.529-1(c). See Page 34 of http://www.irs.gov/pub/i...
by jared
Tue May 27, 2014 11:32 am
 
Forum: Personal Finance (Not Investing)
Topic: 529 Account & Non credit course
Replies: 9
Views: 788

Re: IL resident, anyone have issue with state tax?

So I moved to IL because of my wife. I only have been here for a few years, but have had a few issues with IL taxes. I filed electronically to save time, but I got a notice of correction from IL. I looked and realized that it excluded tax paid to another state. It turns out that IL can't handle ele...
by jared
Tue May 06, 2014 1:36 am
 
Forum: Personal Finance (Not Investing)
Topic: IL resident, anyone have issue with state tax?
Replies: 5
Views: 582

Re: Jointly own condo with Mom - Tax problems ahead?

My understanding is that when you sell the house, the basis of half the house (the half your mother owned) will be one-half of whatever the value was at the time she died. The basis for the other half (the part you owned originally) will be one-half of whatever was paid for the house plus a share o...
by jared
Fri May 02, 2014 1:08 am
 
Forum: Investing - Help with Personal Investments
Topic: Jointly own condo with Mom - Tax problems ahead?
Replies: 11
Views: 1136

Re: Jointly own condo with Mom - Tax problems ahead?

The entire value of jointly held property (non-spouses) with the right of survivorship is included in a decedent’s gross estate except for the portion of the property for which the surviving joint tenant furnished consideration. See IRC 2040(a). (http://www.law.cornell.edu/uscode/text/26/2040) The b...
by jared
Thu May 01, 2014 9:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Jointly own condo with Mom - Tax problems ahead?
Replies: 11
Views: 1136

Re: Anyone on the TaxAlmanac.org forum?

FYI - Taxalmanac.org will be offline permanently on 6/1/14. One of the members has created a new site/forum to replace TA: http://www.taxprotalk.com/forums/ Many of the TA users have migrated to the new forum. Just thought I would share in case any Boglehead Tax Pros and former TA users weren't aware.
by jared
Wed Apr 30, 2014 10:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Anyone on the TaxAlmanac.org forum?
Replies: 7
Views: 767

Re: Transfer securities from IRA to satisfy RMD?

Maybe someone should "Ask J.K." why the stock in the taxable account has a zero basis. Good question. In this fairmark thread on in-kind distribution, Alan S provides guidance that contradicts JK. http://fairmark.com/forum/read.php?2,34649 Re: RMD from IRA Acct to Non IRA Acct Posted by: ...
by jared
Wed Apr 30, 2014 3:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Transfer securities from IRA to satisfy RMD?
Replies: 12
Views: 740

Re: Transfer securities from IRA to satisfy RMD?

There is something called an in-kind IRA distribution that may work for your mom http://www.jklasser.com/askjk/i-have-to-take-a-required-minimum-distribution-from-my-ira-can-i-take-stock-instead-of-cash/ I have to take a required minimum distribution from my IRA. Can I take stock instead of cash? Y...
by jared
Wed Apr 30, 2014 2:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Transfer securities from IRA to satisfy RMD?
Replies: 12
Views: 740

Re: Do I need an accountant? Small business with 55 k in rev

I should have said "may" be recaptured. I got swept up in the excitement of deductions for a home office, and did not realize the home office deductions are factored in and require more action on tax returns when the home is sold, than if never declared as home office deductions. I person...
by jared
Sun Apr 06, 2014 9:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do I need an accountant? Small business with 55 k in revenue
Replies: 8
Views: 451

Re: Do I need an accountant? Small business with 55 k in rev

Lafder wrote:Any home office deductions will be recaptured when you sell your home. So it may or may not be worth the hassle to declare them.

Fortunately, this isn't true.
by jared
Sun Apr 06, 2014 9:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do I need an accountant? Small business with 55 k in revenue
Replies: 8
Views: 451

Re: Illinois tax question

Angelus359 wrote:Illinois has a 5% flat tax

If I contributed to traditional IRA, and then converted to Roth IRA, would it avoid the tax?

Yes.
by jared
Sun Apr 06, 2014 8:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Illinois tax question
Replies: 19
Views: 872

Re: business tax

SeattleCPA: I believe that book may be too out of my reach. I guess I am looking for something in between Business Tax for Dummies and your BNA book. Also, you being a CPA, may I ask you; is it common for some CPAs to delay to a point when stress kicks in and you are forced to rely on their experti...
by jared
Sat Apr 05, 2014 12:15 am
 
Forum: Personal Finance (Not Investing)
Topic: business tax
Replies: 10
Views: 572

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

A few more questions on this topic: 1. I will start taking social security in 9 years, at which time my tax bracket may go up. So is it foolish to depreciate now if I am in the 15% bracket? 2. And can you start and stop depreciating at will? 3. If you stop depreciating do you have to pay the back d...
by jared
Wed Apr 02, 2014 12:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: When does depreciating a rental property save on taxes?
Replies: 70
Views: 4902

Re: Attempt at explaining the backdoor Roth to my new accoun

These comments underscore just how large and complex the tax code is. If you compare tax work with general legal work, you will note that most lawyers specialize in a rather narrow corridor of the legal field. Often CPAs and those that specialize in business tax preparation are not fully familiar w...
by jared
Mon Mar 24, 2014 10:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Attempt at explaining the backdoor Roth to my new accountant
Replies: 26
Views: 2421

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

I will let others chime in, letsgobobby, but here is my understanding of things: 1) it does not matter if you are an active or passive manager. If you are passive, you can subtract the cost of property management against the rental income. 2) At income of under 150k, you can deduct the losses again...
by jared
Sat Mar 22, 2014 10:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: When does depreciating a rental property save on taxes?
Replies: 70
Views: 4902

Re: State taxes and out of state rental property

Do I really have to fill out a non-resident state income tax return if I have a rental property in another state? Need to review state tax website to see if you have to file a tax return. Most states excuse taxpayers whose income is below a certain amount from filing a tax return. That's how most n...
by jared
Sat Mar 22, 2014 10:53 am
 
Forum: Investing - Theory, News & General
Topic: State taxes and out of state rental property
Replies: 25
Views: 1739

Re: Short Sale

Without any facts, it's impossible to answer your questions. This is a complex area, even when facts are present. We don't even know if you have a loss. We don't know if you have cancelled debt. We don't know if loans are recourse or non-recourse. We don't know if you are insolvent. We don't know an...
by jared
Tue Mar 18, 2014 10:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Short Sale
Replies: 4
Views: 613

Re: Taxes and Paying for college from 529 or UTMA Account

I don't think you'll find a definite answer. Here's an article from a few years ago discussing the issue you bring up: http://www.aicpa.org/publications/taxadviser/2010/august/pages/nichols_aug-2010.aspx If I was in your position, and it benefited me to do so, I think I would lean toward including t...
by jared
Tue Mar 18, 2014 12:27 am
 
Forum: Personal Finance (Not Investing)
Topic: Taxes and Paying for college from 529 or UTMA Account
Replies: 6
Views: 524

Re: 529 Plan & Turbo Tax Question

Jared, any idea what I should do in Turbotax to make the $74 disappear. ? I don't see where i can make any adjustments via the the Easy Step View. Based on what you said I should not be penalized that 10%. Not a clue. I've never used Turbo Tax. I'm guessing there's an entry somewhere to exclude all...
by jared
Sun Mar 16, 2014 5:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: 529 Plan & Turbo Tax Question
Replies: 14
Views: 891

Re: 529 Plan & Turbo Tax Question

The software is probably figuring a 10% additional tax on the taxable earnings. As I've already mentioned, if the distributions are included in income only because the qualified education expenses were used in computing the American Opportunity Credit, then the 10% additional tax does not apply.
by jared
Sun Mar 16, 2014 4:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: 529 Plan & Turbo Tax Question
Replies: 14
Views: 891

Re: 529 Plan & Turbo Tax Question

Livesoft.. I just got off the phone with an accountant via the Turbotax help line. This guys actually seems knowledgeable :-) But i did have to go through an initial person who was absolutely clueless, but was obligated to help regardless. The accountant says that I should not include any 1099-Qs i...
by jared
Sat Mar 15, 2014 5:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: 529 Plan & Turbo Tax Question
Replies: 14
Views: 891

Re: 529s and overfunding

also, keep in mind that although the "worst case scenario" penalties are steep (10%, plus being taxed as ordinary income), this only applies to earnings. you can pull the principal, at any time, with no penalty. Are you suggesting that one can take a distribution that only includes princi...
by jared
Sat Mar 15, 2014 11:55 am
 
Forum: Investing - Help with Personal Investments
Topic: 529s and overfunding
Replies: 23
Views: 1461

Re: 529 Plan & Turbo Tax Question

Q1: I believe the taxable earnings should be included in gross income of the beneficiary. Q2: Line 21, Other income Q3: Move it to your child's tax return. Your child might not even be required to file a return. You might even have to pay a 10% penalty for a non-qualified withdrawal. If the distribu...
by jared
Sat Mar 15, 2014 1:18 am
 
Forum: Personal Finance (Not Investing)
Topic: 529 Plan & Turbo Tax Question
Replies: 14
Views: 891

Re: Anyone on the TaxAlmanac.org forum?

ualdriver wrote:
jared wrote:What's your username over there?


Thanks for your help. Looks like it is working now.

:sharebeer
by jared
Thu Mar 13, 2014 11:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: Anyone on the TaxAlmanac.org forum?
Replies: 7
Views: 767

Re: Anyone on the TaxAlmanac.org forum?

What's your username over there?
by jared
Thu Mar 13, 2014 10:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Anyone on the TaxAlmanac.org forum?
Replies: 7
Views: 767

Re: Does barter income count toward IRA contributions?

I believe the activity would have to rise to the level of a trade or business in order to be considered compensation for IRA contribution purposes. You didn't really tell us much about the activity, but if you have properly determined that the activity doesn't belong on Schedule C, then I think it's...
by jared
Thu Mar 13, 2014 4:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does barter income count toward IRA contributions?
Replies: 5
Views: 864

Re: Education tax credit for Spring 2013 class but paid in 2

jcw, As jebmke says, the educational credit can only be claimed in the tax year the qualified expense was actually paid. Therefore, tax year 2012 in your case. But you might want to take another look at your 2012 tax return and see if you would benefit by filing an amended tax return for that year ...
by jared
Wed Mar 12, 2014 10:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: Education tax credit for Spring 2013 class but paid in 2012
Replies: 18
Views: 1044

Re: Education tax credit for Spring 2013 class but paid in 2

Just following up on this. It looks like students can write this off if Box 7 is checked. This indicates that a portion of the tuition was used in the Spring Semester. My CPA indicated that is was okay to try for it, although, the IRS could deny it and I could have to pay interest. This turbo tax a...
by jared
Tue Mar 11, 2014 9:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: Education tax credit for Spring 2013 class but paid in 2012
Replies: 18
Views: 1044

Re: Question About Claiming Parent as Dependent

Because Mom has taxable income greater than $3,900, you can not claim her as a dependent. Sorry :| Dividends vs. earned income has no impact. It is dependent on taxable income vs. non taxable income. Actually, the income test is based on gross income. It's true that some items are specifically excl...
by jared
Thu Feb 27, 2014 12:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: Question About Claiming Parent as Dependent
Replies: 25
Views: 1070

Re: Alternative to paying tax on side income

MikeinNJ wrote:I was more looking to see IF I would have to pay a tax if they wrote a check directly to my student loan servicer.

Yes.
MikeinNJ wrote:Would I be paying less tax or no tax if they wrote it directly to my loan servicer? .

No, you would be paying the same tax.
by jared
Tue Feb 25, 2014 11:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: Advice on paying tax on side income
Replies: 19
Views: 928

Re: S Corp health ins deduction a wash?

The health insurance deduction on the S Corp return in the form of wages reduces the flow-through earnings on the Schedule K-1. Assume your S Corp generates $100,000 of income before salary and health insurance. You pay a salary of $50,000 and your health insurance premiums are $5,000. Scenario 1 - ...
by jared
Mon Feb 24, 2014 1:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: S Corp health ins deduction a wash?
Replies: 3
Views: 235

Re: Would you file a state tax return amendment for $300?

That's confusing to me too. If you intentionally ignore or leave off a property tax payment causing a smaller deduction is that really perjury? The perjury would involve the word complete. If you leave out a deduction that you could take but take other deductions, is your return complete? true, cor...
by jared
Sun Feb 23, 2014 4:12 am
 
Forum: Personal Finance (Not Investing)
Topic: Would you file a state tax return amendment for $300?
Replies: 20
Views: 1816

Re: Would you file a state tax return amendment for $300?

I forgot to include home property taxes ($6500) on my 2012 tax return, using turbotax. It doesn't affect my acutal federal return because I'm in AMT. It does impact my state return by $300 (4.6% - Colorado). I'm trying to decide whether it's worth the hassle for $300. Can I only amend the state ret...
by jared
Sun Feb 23, 2014 1:29 am
 
Forum: Personal Finance (Not Investing)
Topic: Would you file a state tax return amendment for $300?
Replies: 20
Views: 1816

Re: 1099 Misc Tax Question... Help appreciated!

So here's what I found in the contract - looks like 1099-Misc is correct... now the only question is how can I claim moving expenses from 2011 in 2013, 2014, and 2015 since it is the later dates in which the 1099 is being filed to the IRS by the hospital... "Forgiveness. Upon each payment date...
by jared
Thu Feb 20, 2014 1:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: 1099 Misc Tax Question... Help appreciated!
Replies: 10
Views: 936

Re: 1099 Misc Tax Question... Help appreciated!

I think these deals are pretty common in the medical field. I seriously doubt this constitutes a bona fide loan. Was there an unconditional promise to repay the funds? Did you or the hospital actually intend repayment? Did you have a fixed schedule for repayment? They can call it whatever they want,...
by jared
Tue Feb 18, 2014 10:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: 1099 Misc Tax Question... Help appreciated!
Replies: 10
Views: 936
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