Search found 1039 matches

by MarkNYC
Tue Dec 06, 2016 1:31 pm
Forum: Investing - Help with Personal Investments
Topic: Can I time-shift sole proprietor income to max employer solo401k contributions?
Replies: 9
Views: 583

Re: Can I time-shift sole proprietor income to max employer solo401k contributions?

OP here. Thanks all, very helpful. It might seem to be semantics, but when it comes to the IRS, it most definitely matters. If you have a discussion with a client and the payment delay to next year is for "your" convenience, then the payment was constructively received this year. If it is...
by MarkNYC
Mon Dec 05, 2016 10:47 pm
Forum: Investing - Theory, News & General
Topic: When is the five years up for Roth conversion
Replies: 7
Views: 1071

Re: When is the five years up for Roth conversion

My wife converted her traditional IRA on 12/8/2012. When does the five year wait period expire so that earnings can be withdrawn without penalty? Is it Jan. 1, 2017? The 5-year period would end on Jan 1, 2017, after which the conversion amount can be withdrawn without penalty, even prior to age 59....
by MarkNYC
Sat Dec 03, 2016 4:20 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated Tax (IRA to ROTH conversion) question
Replies: 11
Views: 665

Re: Estimated Tax (IRA to ROTH conversion) question

Please correct me if I'm wrong: As I understand it, form 2210 provides a number of (rather cumbersome) methods to calculate interest on underpayment by "quarter," not necessarily penalty. A penalty is for a specific violation, such as failure to file, etc. It is the equivalent of interest...
by MarkNYC
Sun Nov 27, 2016 10:22 pm
Forum: Personal Finance (Not Investing)
Topic: An IRS correspondence mess
Replies: 40
Views: 2753

Re: An IRS correspondence mess

The IRS has already provided me with an actual xerox of the filed return for 2013. In that case, I wouldn't need a transcript, right? But a letter which was sent to the IRS says "we corrected a typo and corrected the amount we were due...". I have no idea what that really means and neithe...
by MarkNYC
Sun Nov 27, 2016 7:20 pm
Forum: Personal Finance (Not Investing)
Topic: An IRS correspondence mess
Replies: 40
Views: 2753

Re: An IRS correspondence mess

neurosphere, A few comments in response to your posts above: 1. The language in IRS Notice CP22A is misleading, and should not be interpreted to mean an amended return was filed, or even that the taxpayer ever requested a change to the tax return. 2. A person who prepares a tax return for a friend o...
by MarkNYC
Wed Nov 23, 2016 12:10 pm
Forum: Personal Finance (Not Investing)
Topic: Checking IRS refund applied to next year's return
Replies: 11
Views: 856

Re: Checking IRS refund applied to next year's return

As far as I know, having the refund applied to next year's taxes isn't any more effective than taking the refund and then paying an estimated tax. That is what I do. Since the OP filed late in the year for TY 2015, if the refund, once received, is paid toward this year's estimated tax, wouldn't it ...
by MarkNYC
Sun Nov 20, 2016 9:37 am
Forum: Personal Finance (Not Investing)
Topic: IRS quarterly estimated tax payments
Replies: 19
Views: 1734

Re: IRS quarterly estimated tax payments

MarkNYC and dodecahedron are you telling me that if you made an estimated tax payment of $10K for the first three quarters and $20K for the fourth quarter and filed no Form 2210, that the IRS is not going to question that even if the total was sufficient for total tax liability? That runs counter t...
by MarkNYC
Sat Nov 19, 2016 10:21 pm
Forum: Personal Finance (Not Investing)
Topic: IRS quarterly estimated tax payments
Replies: 19
Views: 1734

Re: IRS quarterly estimated tax payments

Very helpful replies thank you. I am in the 28% tax bracket. As far as quarterly payments, I've always had to make the fourth payment higher than the first three. I guess I will get a letter from the IRS or incur a penalty. Unequal quarterly estimated payments require Form 2210. If the 4th quarter ...
by MarkNYC
Sat Nov 19, 2016 8:01 pm
Forum: Personal Finance (Not Investing)
Topic: An IRS correspondence mess
Replies: 40
Views: 2753

Re: An IRS correspondence mess

In addition, IRS Tax Information Authorization Form 8821 will allow anyone designated by the taxpayer to receive, either verbally or in writing, the taxpayer's confidential tax information. The form is more restrictive than the Form 2848 in that it does not allow the representative to advocate for ...
by MarkNYC
Sat Nov 19, 2016 7:54 pm
Forum: Personal Finance (Not Investing)
Topic: IRS quarterly estimated tax payments
Replies: 19
Views: 1734

Re: IRS quarterly estimated tax payments

Very helpful replies thank you. I am in the 28% tax bracket. As far as quarterly payments, I've always had to make the fourth payment higher than the first three. I guess I will get a letter from the IRS or incur a penalty. If each of your first 3 quarterly payments was adequate, and you don't need...
by MarkNYC
Sat Nov 19, 2016 7:35 pm
Forum: Personal Finance (Not Investing)
Topic: An IRS correspondence mess
Replies: 40
Views: 2753

Re: An IRS correspondence mess

They can probably tell you how to initiate the query, but you probably can't do it on your friend's behalf (short of a power of attorney). Except for professionals recognized by the IRS (Enrolled Agents, CPAs, and attorneys), it is not that easy to get a Power of Attorney (POA) recognized by the IR...
by MarkNYC
Sat Nov 19, 2016 6:34 pm
Forum: Personal Finance (Not Investing)
Topic: An IRS correspondence mess
Replies: 40
Views: 2753

Re: An IRS correspondence mess

(My personal guess is that the check is somewhere in the preparer's office and was never deposited... and that the IRS computer that says "we overpaid" didn't talk to the IRS computer that knows whether or not the check ever cleared.) Why should the check be in the preparer's office? It i...
by MarkNYC
Sat Nov 12, 2016 9:58 am
Forum: Investing - Help with Personal Investments
Topic: Submitted Form 8606 for Non-deductible IRA and IRS asks for 1040x
Replies: 24
Views: 1514

Re: Submitted Form 8606 for Non-deductible IRA and IRS asks for 1040x

I'm not aware of any written IRS policy that ever allowed the separate filing of Form 8606 for a prior year after the 1040 has been filed for that year, suggesting that an amended return is not required. For at least the last 15 years, the IRS instructions to Form 8606 have instructed the form to b...
by MarkNYC
Fri Nov 11, 2016 10:13 pm
Forum: Investing - Help with Personal Investments
Topic: Submitted Form 8606 for Non-deductible IRA and IRS asks for 1040x
Replies: 24
Views: 1514

Re: Submitted Form 8606 for Non-deductible IRA and IRS asks for 1040x

I'm not aware of any written IRS policy that ever allowed the separate filing of Form 8606 for a prior year after the 1040 has been filed for that year, suggesting that an amended return is not required. For at least the last 15 years, the IRS instructions to Form 8606 have instructed the form to b...
by MarkNYC
Fri Nov 11, 2016 7:20 pm
Forum: Investing - Help with Personal Investments
Topic: Submitted Form 8606 for Non-deductible IRA and IRS asks for 1040x
Replies: 24
Views: 1514

Re: Submitted Form 8606 for Non-deductible IRA and IRS asks for 1040x

It is possible the IRS has gotten so many naked Forms 8606 that they have decided to change their procedure and require the 1040x. I'm not aware of any written IRS policy that ever allowed the separate filing of Form 8606 for a prior year after the 1040 has been filed for that year, suggesting that...
by MarkNYC
Sun Oct 30, 2016 10:11 am
Forum: Investing - Theory, News & General
Topic: Schwab and 1099s
Replies: 11
Views: 639

Re: Schwab and 1099s

A separate 1099 such as 1099-INT from a bank, or 1099-DIV from a mutual fund company, is required to be mailed by January 31. Since 2008, a brokerage firm's consolidated 1099 which combines 1099-INT, 1099-DIV and 1099-B, is not required to be mailed until February 15. My sense is that banks and mutu...
by MarkNYC
Sun Oct 23, 2016 7:10 pm
Forum: Personal Finance (Not Investing)
Topic: Over-contribute to 401k to get match: tax implications
Replies: 15
Views: 1889

Re: Over-contribute to 401k to get match: tax implications

Some of the terminology being used is not correct, and can lead to confusion. The situation being discussed is potential 401K "excess deferrals", not "excess contributions." The definitions are not the same, and the rules regarding corrective distributions are also different. &qu...
by MarkNYC
Mon Oct 10, 2016 7:00 pm
Forum: Personal Finance (Not Investing)
Topic: My tax situation, looking for advice or for someone to take a look at it
Replies: 40
Views: 3501

Re: My tax situation, looking for advice or for someone to take a look at it

For joint filers, the modified AGI limits are the same for both a Roth contribution and for a deductible IRA contribution for a spouse who is not an active participant in an employer retirement plan when the other spouse is an active participant. For 2016, the phase-out range is between $184k and $1...
by MarkNYC
Mon Oct 10, 2016 6:43 pm
Forum: Personal Finance (Not Investing)
Topic: My tax situation, looking for advice or for someone to take a look at it
Replies: 40
Views: 3501

Re: My tax situation, looking for advice or for someone to take a look at it

I get about $7000 in rent, but I also pay mortgage interest, real estate taxes, etc.. Gamma Ray, You could start another individual 401K account for this business income and none of it will be taxable. KlangFool Rental income is passive activity income. It is not earnings from self-employment, ther...
by MarkNYC
Fri Oct 07, 2016 2:19 pm
Forum: Personal Finance (Not Investing)
Topic: Trust-- disagree with CPA's Simple/Complex determination
Replies: 22
Views: 1677

Re: Trust-- disagree with CPA's Simple/Complex determination

neurosphere, It can be confusing. Per the instructions to Trust Form 1041: A trust may qualify as a simple trust if: 1. The trust instrument requires all income to be distributed currently 2. The trust instrument doesn't provide for charitable contributions, AND 3. The trust doesn't distribute princ...
by MarkNYC
Fri Oct 07, 2016 1:07 pm
Forum: Personal Finance (Not Investing)
Topic: Trust-- disagree with CPA's Simple/Complex determination
Replies: 22
Views: 1677

Re: Trust-- disagree with CPA's Simple/Complex determination

I am the trustee of a trust for the benefit of a relative. The trust document requires that I distribute all the income at least annually. The sole beneficiary of the trust has requested a fixed annual distribution that is sometimes more than the trust income and sometimes less. I have discretion t...
by MarkNYC
Thu Oct 06, 2016 10:37 am
Forum: Personal Finance (Not Investing)
Topic: Trust-- disagree with CPA's Simple/Complex determination
Replies: 22
Views: 1677

Re: Trust-- disagree with CPA's Simple/Complex determination

If the trust (simple or complex) is required to distribute all its income it gets a $300 exemption. Otherwise it gets a $100 exemption. Section 642(b)(2). Along those lines, it may be worth checking to see if the trust is a qualified disability trust under Section 642(b)(2)(C), in which case it wou...
by MarkNYC
Thu Oct 06, 2016 8:25 am
Forum: Personal Finance (Not Investing)
Topic: Trust-- disagree with CPA's Simple/Complex determination
Replies: 22
Views: 1677

Re: Trust-- disagree with CPA's Simple/Complex determination

If distributions are discretionary, it should be a complex trust. But if the trustee distributes all of the income each year, then the beneficiary will taxed on all of the income regardless of whether the tax return is filed as a Simple or Complex trust. Incorrectly filing as a Simple trust would ca...
by MarkNYC
Tue Oct 04, 2016 4:08 pm
Forum: Personal Finance (Not Investing)
Topic: Resolving Trust Distribution Issues
Replies: 6
Views: 576

Re: Resolving Trust Distribution Issues

I am working through a problem with a set of trusts that were set up and managed by my father back in 1997 for my grandmother's estate. The trusts essentially divided up a portion of her estate for distribution to various beneficiaries when they turn 35. These beneficiaries are in another branch of...
by MarkNYC
Mon Oct 03, 2016 1:11 pm
Forum: Personal Finance (Not Investing)
Topic: Carryover loss question
Replies: 16
Views: 1048

Re: Carryover loss question

The rules for a Net Operating Loss (NOL) can be complicated, and are different from capital losses. Generally, an NOL is the excess of allowable deductions over total income, allowing for certain modifications. An NOL usually occurs when net nonpassive business losses (Schedule C or Schedule E) exc...
by MarkNYC
Mon Oct 03, 2016 12:10 pm
Forum: Personal Finance (Not Investing)
Topic: Carryover loss question
Replies: 16
Views: 1048

Re: Carryover loss question

The rules for a Net Operating Loss (NOL) can be complicated, and are different from capital losses. Generally, an NOL is the excess of allowable deductions over total income, allowing for certain modifications. An NOL usually occurs when net nonpassive business losses (Schedule C or Schedule E) exce...
by MarkNYC
Fri Sep 30, 2016 6:55 pm
Forum: Investing - Theory, News & General
Topic: why not just buy BRK
Replies: 85
Views: 7788

Re: why not just buy BRK

Larry, In your article, you compared Berkshire's performance to both large value and small value index funds. Given Berkshire's size and the size of its major holdings, why do you think it's appropriate to compare Berkshire's returns to the returns of a small value index fund? Disclosure: I've owned...
by MarkNYC
Wed Sep 28, 2016 6:10 pm
Forum: Personal Finance (Not Investing)
Topic: Tax filing status if divorce not finalized?
Replies: 19
Views: 1003

Re: Tax filing status if divorce not finalized?

Not an option due to the hostility between us. Plus, I have no idea how she's handled any of her earnings or tax payments this year given that she's not a W-2 employee, so that's a hornets nest I am staying away from. Some things will need to be coordinated. For example, if you file MFS, you both h...
by MarkNYC
Wed Sep 28, 2016 4:41 pm
Forum: Personal Finance (Not Investing)
Topic: Tax filing status if divorce not finalized?
Replies: 19
Views: 1003

Re: Tax filing status if divorce not finalized?

Not an option due to the hostility between us. Plus, I have no idea how she's handled any of her earnings or tax payments this year given that she's not a W-2 employee, so that's a hornets nest I am staying away from. When the split up is hostile, certain tax issues can be complicated, including th...
by MarkNYC
Mon Sep 19, 2016 7:38 pm
Forum: Personal Finance (Not Investing)
Topic: Please Help me Calculate Tax on Rental Sale (Former Homestead)
Replies: 11
Views: 679

Re: Please Help me Calculate Tax on Rental Sale (Former Homestead)

On a joint return, up to $500K of gain can be excluded, but eligibility is determined separately for each spouse. Since you meet the qualifications but your spouse does not, you can exclude up to $250K on the joint return. (Reg 1.121-2) Having rented it out 2-3 years prior to sale does not disquali...
by MarkNYC
Sun Sep 18, 2016 7:13 pm
Forum: Personal Finance (Not Investing)
Topic: Please Help me Calculate Tax on Rental Sale (Former Homestead)
Replies: 11
Views: 679

Re: Please Help me Calculate Tax on Rental Sale (Former Homestead)

On a joint return, up to $500K of gain can be excluded, but eligibility is determined separately for each spouse. Since you meet the qualifications but your spouse does not, you can exclude up to $250K on the joint return. (Reg 1.121-2) Having rented it out 2-3 years prior to sale does not disqualif...
by MarkNYC
Sun Sep 18, 2016 2:54 pm
Forum: Personal Finance (Not Investing)
Topic: Definition of gambling winnings/losses
Replies: 20
Views: 928

Re: Definition of gambling winnings/losses

I won $7,500 in a "raffle" at a casino. I say "raffle" because no bet was made. We were given tickets in envelopes and you opened it to reveal what you had won. I did not have to pay any money to get in this raffle. The casino issued me a 1099-MISC form that listed the $7,500 as...
by MarkNYC
Fri Sep 09, 2016 7:30 pm
Forum: Personal Finance (Not Investing)
Topic: How do taxes work for rental income
Replies: 26
Views: 2424

Re: How do taxes work for rental income

Pretty much. You can also take depreciation, property taxes, and any other related expenses. It all gets reported on Schedule E. you "must" take depreciation, since it will be recaptured later on. However, per Sec 1250(b)(3), if the taxpayer can establish by records or other adequate evid...
by MarkNYC
Fri Sep 09, 2016 3:29 pm
Forum: Personal Finance (Not Investing)
Topic: How do taxes work for rental income
Replies: 26
Views: 2424

Re: How do taxes work for rental income

Pretty much. You can also take depreciation, property taxes, and any other related expenses. It all gets reported on Schedule E. you "must" take depreciation, since it will be recaptured later on. Technically, you don't have to. You just pay recapture as if you took deprecation. So, it's ...
by MarkNYC
Thu Sep 08, 2016 1:04 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Lien
Replies: 13
Views: 1120

Re: Tax Lien

A federal tax lien attaches to all assets of the taxpayer, not just a specific asset. In some situations, a specific asset can be "discharged" from the lien prior to the tax liability being paid. One of those situations is if an agreement is reached with the IRS allowing the property to be...
by MarkNYC
Wed Sep 07, 2016 12:23 pm
Forum: Personal Finance (Not Investing)
Topic: Question about capital gains on home sale.
Replies: 35
Views: 2080

Re: Question about capital gains on home sale.

Interesting issue regarding a loss, which no one here really knows about. If there was a true loss in 2009 which she COULD have declared but did not, it might be beneficial to file amended tax returns for all of those years. The IRS generally wants to file an amended return within three years of wh...
by MarkNYC
Wed Aug 31, 2016 4:04 pm
Forum: Investing - Theory, News & General
Topic: Passive Income relating to IRA questions
Replies: 9
Views: 615

Re: Passive Income relating to IRA questions

I know the government's rule is earned income only for IRAs. Why do they limit this to earned income and why not passive income? I would think a heady lawyer could tear this apart in court. Example, if I own rental properties, which I do, they view that as a passive income stream, which is total BS...
by MarkNYC
Tue Aug 23, 2016 9:40 pm
Forum: Personal Finance (Not Investing)
Topic: Timing on estimated federal tax payments
Replies: 11
Views: 931

Re: Timing on estimated federal tax payments

Isn't the penalty only something like 2% on an annual basis? If so, the OP may just decide to sort it out when it's time to file the tax return. I think a lot of folks do that since it is "Penalty," but with a small "p." If I'm mistaken, I would appreciate somebody clarifying, a...
by MarkNYC
Tue Aug 23, 2016 9:18 pm
Forum: Personal Finance (Not Investing)
Topic: Timing on estimated federal tax payments
Replies: 11
Views: 931

Re: Timing on estimated federal tax payments

Your situation may present you with a bit of a dilemma. When you received the $57K conversion income in January, the IRS will assume the income was received evenly throughout the year, so you can spread the tax payments on that income evenly throughout the year. Fair enough. Now, if you have additio...
by MarkNYC
Fri Aug 19, 2016 10:00 am
Forum: Personal Finance (Not Investing)
Topic: Recommend CPA in the NYC/NJ Area
Replies: 9
Views: 899

Re: Recommend CPA in the NYC/NJ Area

I know at least a few hundred of them...They're unlikely to help you save money. Bruce, I'm a bit surprised that you would make this comment. An experienced, competent, tax-oriented CPA can help save money for a high-income professional in many ways, including but not limited to: 1. Making sure all...
by MarkNYC
Tue Aug 16, 2016 2:23 pm
Forum: Personal Finance (Not Investing)
Topic: Looking for clarification on IRA Rollover One-Per-Year rule
Replies: 16
Views: 642

Re: Looking for clarification on IRA Rollover One-Per-Year rule

ddb, If you read § 408(d)(3)(B) carefully, you will see that the 1-year limitation period for rollovers starts from the date of the original distribution. In your example, it was 7/1/2016. The subsection of this code says: "This paragraph does not apply to any amount described in subparagraph ...
by MarkNYC
Tue Aug 16, 2016 1:17 pm
Forum: Personal Finance (Not Investing)
Topic: Looking for clarification on IRA Rollover One-Per-Year rule
Replies: 16
Views: 642

Re: Looking for clarification on IRA Rollover One-Per-Year rule

I've read through each of the above sections, and it's still not clear to me if a rollover contribution is allowable on multiple distributions from the preceding 60 days. e.g. let's say an IRA owner makes the following distributions. 07/01/2016: $5,000 (60-day window ends 08/30/2016) 07/15/2016: $3...
by MarkNYC
Tue Aug 16, 2016 12:32 pm
Forum: Personal Finance (Not Investing)
Topic: Inherited ROTH IRA Disribution Options - I don't get the advantage of the 5-yr method
Replies: 10
Views: 975

Re: Inherited ROTH IRA Disribution Options - I don't get the advantage of the 5-yr method

(1) If, during the first 4 years the beneficiary either forgot to take RMDs or thought they weren't required, and in the 5th year has an immediate need for most of the Roth IRA funds, then a full distribution in the 5th year might make sense, to avoid dealing with 4 years of potential 50% penalties...
by MarkNYC
Tue Aug 16, 2016 9:21 am
Forum: Personal Finance (Not Investing)
Topic: Inherited ROTH IRA Disribution Options - I don't get the advantage of the 5-yr method
Replies: 10
Views: 975

Re: Inherited ROTH IRA Disribution Options - I don't get the advantage of the 5-yr method

Option #1 Lump Sum Distribution is not actually a separate option. It would simply fall within the scope of Option #2 - 5 Year Method. I can think of two situations where selecting the 5 Year Method might make sense: (1) If, during the first 4 years the beneficiary either forgot to take RMDs or thou...
by MarkNYC
Fri Aug 12, 2016 7:07 pm
Forum: Personal Finance (Not Investing)
Topic: Capital loss on a house
Replies: 1
Views: 377

Re: Capital loss on a house

With the facts that you've presented, I would say that the property that was sold was a 2nd personal residence, since it was never formally converted to investment property. A loss on the sale of a personal residence is nondeductible.
by MarkNYC
Thu Aug 11, 2016 4:24 pm
Forum: Personal Finance (Not Investing)
Topic: Direction on a couple of early retirement questions
Replies: 5
Views: 611

Re: Direction on a couple of early retirement questions

Does SEPP apply to 401k plans or just to traditional IRA (which we don’t have). The wiki page on SEPP mentions only traditional IRA, but the IRS page seems to be referring to qualified employer plans as well. For IRAs, there are 12 separate exceptions to the 10% early distribution penalty. For qual...
by MarkNYC
Tue Aug 09, 2016 3:16 pm
Forum: Investing - Theory, News & General
Topic: Articles that have provoked thought and reflection
Replies: 21
Views: 2714

Re: Articles that have provoked thought and reflection

Even though it was back in 2009, the article's insights have stayed with me, and a certain prominent TV financial guru might benefit by reading it: "Bond Funds vs Individual Bonds" by Litman Gregory Investment Research Team.
by MarkNYC
Wed Jul 27, 2016 10:13 am
Forum: Personal Finance (Not Investing)
Topic: Selling House that was a Partial Rental
Replies: 3
Views: 473

Re: Selling House that was a Partial Rental

Since the rental unit was part of his home (not separate from it), there is no need to allocate basis and sales proceeds between the rental unit and the principal residence portion of the property. Thus no part of the gain needs to be reported on Form 4797. The $22,000 depreciation taken is not elig...
by MarkNYC
Fri Jul 22, 2016 9:42 am
Forum: Personal Finance (Not Investing)
Topic: Person Died, RMD Not Paid
Replies: 17
Views: 1871

Re: Person Died, RMD Not Paid

Why are the IRAs in the estate at all? Presumably, they passed to the beneficiaries without even getting into the estate. I used the term 'estate' in a broad generalized sense to encompass all the assets. They're not subject to probate and do get passed on as you describe. But my question remains. ...
by MarkNYC
Thu Jul 21, 2016 8:12 pm
Forum: Personal Finance (Not Investing)
Topic: Tax help - IRS asking for money for 2014- messed up backdoor ROTH - form 8606 - PLEASE HELP!!!!!!!
Replies: 39
Views: 3268

Re: Tax help - IRS asking for money for 2014- messed up backdoor ROTH - form 8606 - PLEASE HELP!!!!!!!

No, I didn't do anything for year 2013 or 2015. This money was put in 2014 only, I tried to do the back-door roth ira thru vanguard, and then I needed the money for an emergency, so I pulled it out within a few weeks. That's good. I still can't figure why they think you owe for $22k, not $11k unles...

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