Search found 1561 matches

by MarkNYC
Mon Nov 11, 2019 9:18 pm
Forum: Personal Finance (Not Investing)
Topic: Estimating back taxes?
Replies: 5
Views: 316

Re: Estimating back taxes?

I'm currently going through a divorce. We have been separated for three years partially because we owe back taxes and needed to settle with the IRS before we could settle our assets between the wife and I. No returns were filed from 2011 to 2016. Wife has a regular job so her taxes are pretty strai...
by MarkNYC
Sun Nov 10, 2019 6:17 pm
Forum: Personal Finance (Not Investing)
Topic: Do I Understand Safe Harbor rules correctly?
Replies: 27
Views: 2408

Re: Do I Understand Safe Harbor rules correctly?

The OP has two options in order to avoid any penalty: Withhold >= 110% of last year's tax liability and pay 100% of this years tax liability by 4/15. No penalty will be due. Withhold >= 90% of the income and prorated adjustments to income, deductions and credits thru 8/31*. If necessary make a four...
by MarkNYC
Sun Nov 10, 2019 6:07 pm
Forum: Personal Finance (Not Investing)
Topic: Do I Understand Safe Harbor rules correctly?
Replies: 27
Views: 2408

Re: Do I Understand Safe Harbor rules correctly?

What I would suggest doing: a. Use a 2018 tax program, assuming you have one, to estimate what you will owe for 2019. b. Make an estimated payment so your withholding + estimated taxes is >= what you owe for 2019. c. You will need to fill out form 2110 as part of your 2019 taxes. It will break your...
by MarkNYC
Fri Nov 08, 2019 10:05 pm
Forum: Personal Investments
Topic: Question about the 5 Year Rule for Roths
Replies: 14
Views: 1811

Re: Question about the 5 Year Rule for Roths

As stated, contributions can be withdrawn immediately. Earnings are 5 tax years. Jan 2016 in your case. That's understood, as I have no need to withdraw anything, I'm leaving it as legacy for my children. FWIW, I was referring to the erroneous information put out by the IRS agent who told me it wou...
by MarkNYC
Fri Nov 08, 2019 6:05 pm
Forum: Personal Finance (Not Investing)
Topic: Avoiding Capital Gains Taxes on Real Property Sale
Replies: 8
Views: 611

Re: Avoiding Capital Gains Taxes on Real Property Sale

Other than a 1031 exchange, or an investment in an opportunity zone, your only other option is to move back into the house and make it your primary residence for a certain period of time. I thought that the gain during the rental period is still there no matter you move back in the house? Tax exper...
by MarkNYC
Fri Nov 08, 2019 12:47 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversion in year moved out of NYC? How taxed?
Replies: 3
Views: 235

Re: Roth conversion in year moved out of NYC? How taxed?

Income from a Roth conversion is taxable to your resident state at the time of the conversion.
by MarkNYC
Wed Nov 06, 2019 9:31 pm
Forum: Personal Finance (Not Investing)
Topic: Crazy? S-corp renting your own property tax-free for 14 days?
Replies: 12
Views: 894

Re: Crazy? S-corp renting your own property tax-free for 14 days?

-My s-corp rents my own property from me for those 14 days at $1000 a day, which is for the use of the land/accommodation/ food for 5-6 people. -I write this off as a $14,000 expense, saving me about (~20% tax rate of $14,000 =) $2800 in taxes. In addition, I get paid $14,000 tax-free, meaning I co...
by MarkNYC
Mon Nov 04, 2019 7:00 pm
Forum: Personal Finance (Not Investing)
Topic: Conservation Partnership to save taxes
Replies: 14
Views: 737

Re: Conservation Partnership to save taxes

The IRS has included syndicated conservation easements on their list of "Reportable Transactions" meaning they believe such transactions have a high possibility for tax avoidance / fraud. As such, you must attach form 8886 to your return when taking such a charitable deduction. Not only is the tran...
by MarkNYC
Mon Nov 04, 2019 3:50 pm
Forum: Personal Finance (Not Investing)
Topic: Conservation Partnership to save taxes
Replies: 14
Views: 737

Re: Conservation Partnership to save taxes

The article you linked clearly explains that this type of tax-motivated investment is an audit target of the IRS and carries significant risk for the individual investor. If you decide to proceed anyway, you have been forewarned. Doesn't it say that it is a legitimate strategy unless you're claimin...
by MarkNYC
Mon Nov 04, 2019 10:27 am
Forum: Personal Finance (Not Investing)
Topic: Conservation Partnership to save taxes
Replies: 14
Views: 737

Re: Conservation Partnership to save taxes

The article you linked clearly explains that this type of tax-motivated investment is an audit target of the IRS and carries significant risk for the individual investor. If you decide to proceed anyway, you have been forewarned.
by MarkNYC
Thu Oct 31, 2019 10:32 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Tax Notice - Question re Taxable Income
Replies: 10
Views: 1221

Re: IRS Tax Notice - Question re Taxable Income

I can't think of a reason that $800 additional income would increase taxable income by $3,800. My only guess would be that in the revised tax calculation, the IRS either intentionally or accidentally removed a $3,000 capital loss. Did the IRS tax notice make any reference to a change to capital gain...
by MarkNYC
Tue Oct 29, 2019 5:50 pm
Forum: Personal Finance (Not Investing)
Topic: How should the conversion part of a backdoor Roth process be coded on a 1099?
Replies: 2
Views: 194

Re: How should the conversion part of a backdoor Roth process be coded on a 1099?

If you are under 59.5 I think this gets coded "1" If you are 59.5+ it would be coded 7. When under age 59.5, it should be coded "2", indicating that any taxable portion of the distribution/conversion is exempt from the 10% early distribution penalty. Code 2 is an important clue to a tax preparer, t...
by MarkNYC
Tue Oct 29, 2019 1:49 pm
Forum: Personal Investments
Topic: inheritance / gift questions
Replies: 13
Views: 1445

Re: inheritance / gift questions

If the estate is the beneficiary and the executor is stupid enough to take a full distribution, they can not rollover any check to an inherited IRA. All such transfers must be by trustee -> trustee transfer. While they can not use lifetime distributions, they can setup inherited IRAs and have the e...
by MarkNYC
Sun Oct 27, 2019 6:08 pm
Forum: Personal Finance (Not Investing)
Topic: Inheritance question
Replies: 18
Views: 2288

Re: Inheritance question

An uncle passed away last year and I recently received an inheritance that is not a lot but more than the gift tax limit of $15K. I, maybe naively, thought that inheritance is not taxable but the information from the estate attorney's office said they will be sending a schedule K-1 during tax seaso...
by MarkNYC
Mon Oct 21, 2019 9:31 pm
Forum: Personal Finance (Not Investing)
Topic: Can Charitable Giving reduce Net Investment Tax (NIT)?
Replies: 5
Views: 610

Re: Can Charitable Giving reduce Net Investment Tax (NIT)?

For taxpayers above the threshold, the amount of investment income subject to NIIT is based on the lesser of (i) the amount by which your modified adjusted gross income exceeds the applicable threshold and (ii) your net investment income. A charitable contribution will reduce your MAGI, but won't d...
by MarkNYC
Fri Oct 18, 2019 9:36 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Question - RMD on Inherited IRA
Replies: 16
Views: 1158

Re: Tax Question - RMD on Inherited IRA

... if a given beneficiary distributes their 1/7 share, even if certain other beneficiaries fail to act, any beneficiary who withdraws their pro rata share has never been penalized by the IRS for their share of the remaining shortfall. Alan, We know that the IRS never (or almost never) enforces RMD...
by MarkNYC
Thu Oct 17, 2019 6:15 pm
Forum: Personal Investments
Topic: Selling Condo, tax question?
Replies: 4
Views: 739

Re: Selling Condo, tax question?

We have a rental unit we would like to sell. We purchased it for $300K, we've depreciated about $50K so far, we have $30K in Unallowed loss. We also have about $60K in capital loss (Schedule D). If we sell this property for $350K with estimated transaction costs of $20K. What will be our capital ga...
by MarkNYC
Wed Oct 16, 2019 10:11 pm
Forum: Personal Finance (Not Investing)
Topic: Composite Tax Return Question
Replies: 9
Views: 883

Re: Composite Tax Return Question

I've participated in several RE limited partnerships and prepared the taxes myself on Turbotax.  It was a nightmare.  In hindsight I would not have participated in a multi-state fund if I'd known the hardship.  Many investors go into real estate or hedge fund-type investment partnerships without in...
by MarkNYC
Wed Oct 16, 2019 8:16 pm
Forum: Personal Finance (Not Investing)
Topic: Renting out New Building on Property
Replies: 3
Views: 351

Re: Renting out New Building on Property

The net rental income from the new building should not be subject to self-employment tax, regardless of whether the building is owned by you personally or owned by your business.
by MarkNYC
Tue Oct 15, 2019 10:02 am
Forum: Personal Finance (Not Investing)
Topic: [S-Corp tax witholding, ES-1040 excess payments]
Replies: 8
Views: 432

Re: [S-Corp tax witholding, ES-1040 excess payments]

Ok - thank you. I will go with Mark and SpiritRider and withhold taxes in my December payroll. Any thoughts on what to do with the 2018 refund? (Option A, B, C?) The issues to consider are penalty avoidance, the time value of money, and convenience. For me, a big factor in the decision would be the...
by MarkNYC
Mon Oct 14, 2019 6:51 pm
Forum: Personal Finance (Not Investing)
Topic: [S-Corp tax witholding, ES-1040 excess payments]
Replies: 8
Views: 432

Re: Do I need to withhold taxes if paid enough via ES-1040

The IRS does not allow zero withholding just because the taxpayer prefers to use estimated payments. Tax withholding on wages is required unless total tax is expected to be zero. There can be a penalty for this type violation, and although the penalty in not usually assessed, it's best not to press ...
by MarkNYC
Sun Oct 13, 2019 8:37 pm
Forum: Personal Finance (Not Investing)
Topic: Help with Estimated Taxes on Sale of Rental Property
Replies: 5
Views: 681

Re: Help with Estimated Taxes on Sale of Rental Property

You should receive a letter from the IRS explaining the unexpected refund. I think the two most likely reasons would be, in the order of likelihood: (1) you paid more in estimated tax or federal w/h than you reported on the tax return, or (2) you calculated the tax incorrectly. If you did your tax r...
by MarkNYC
Fri Oct 11, 2019 9:39 am
Forum: Personal Finance (Not Investing)
Topic: IRS CP2000 notice -- hard lesson (missing cost basis)
Replies: 35
Views: 3112

Re: IRS CP2000 notice -- hard lesson (missing cost basis)

The lesson is not what record keeping the brokers did or didn't do. The lesson is to properly fill out and file your tax return making sure that cost basis is properly entered on the appropriate forms. A zero entry for cost basis for one of your reported transactions would stand out like a sore thu...
by MarkNYC
Thu Oct 10, 2019 5:45 pm
Forum: Personal Finance (Not Investing)
Topic: Taxes - Goodwill donations, older children's clothing
Replies: 28
Views: 2643

Re: Taxes - Goodwill donations, older children's clothing

Regarding tens of thousands of dollars of used clothing and other various household items, I'd document the heck out of what you're doing as if you're going to be audited. If you don't wind up being audited, then you'll be grateful. In addition to your paper documentation, you might want to take pi...
by MarkNYC
Wed Oct 09, 2019 9:34 pm
Forum: Personal Investments
Topic: Roth IRA’s odd contribution question
Replies: 13
Views: 1041

Re: Roth IRA’s odd contribution question

Next, as long as the Box 1 amount is more than $6000 or $7000 for folks over age 50, you can make the full Roth IRA contribution. The important point to keep in mind here is that because you are participating in an employer plan, your ability to contribute to a traditional IRA is limited, therefore...
by MarkNYC
Wed Oct 09, 2019 5:53 pm
Forum: Personal Finance (Not Investing)
Topic: Taxes - Goodwill donations, older children's clothing
Replies: 28
Views: 2643

Re: Taxes - Goodwill donations, older children's clothing

So I looked it up in the IRS Publication: Appraisals Appraisals are not necessary for items of property for which you claim a deduction of $5,000 or less. There's an exception for clothing over $500.... Generally, if the claimed deduction for an item or group of similar items of donated property is...
by MarkNYC
Wed Oct 09, 2019 11:47 am
Forum: Personal Finance (Not Investing)
Topic: Taxes - Goodwill donations, older children's clothing
Replies: 28
Views: 2643

Re: Taxes - Goodwill donations, older children's clothing

I keep track on its deductible. I just dropped off $12K worth of clothing and similar stuff in the last couple of months and will be donating thousands more in appliances, windows, fixtures etc. Be careful. When claiming a charitable deduction for any group of similar items, such as clothing, where...
by MarkNYC
Sun Oct 06, 2019 5:49 pm
Forum: Personal Finance (Not Investing)
Topic: Tax guy my mom hired has me paying suspiciously high tax on investments
Replies: 46
Views: 6553

Re: Tax guy my mom hired has me paying suspiciously high tax on investments

In general, capital gains in trusts are considered corpus (principal), and are not included in the calculation of the trust's distributable net income (DNI) for the year. Therefore capital gains are generally taxable to the trust even if distributions are made to the beneficiary. There are some sit...
by MarkNYC
Sun Oct 06, 2019 2:26 pm
Forum: Personal Finance (Not Investing)
Topic: Tax guy my mom hired has me paying suspiciously high tax on investments
Replies: 46
Views: 6553

Re: Tax guy my mom hired has me paying suspiciously high tax on investments

... I learned that over the past few years, my mom (the trustee) has been having a tax guy do the taxes on it .... My guess is that he's paying cap gains tax, despite the fact that none of the holdings have been sold. I think it was a stupid move to be paying taxes each year on unrealized capital g...
by MarkNYC
Sun Sep 29, 2019 8:54 pm
Forum: Personal Finance (Not Investing)
Topic: Cashing out RE appreciation or keeping the rental cash flow?
Replies: 28
Views: 2024

Re: Cashing out RE appreciation or keeping the rental cash flow?

Take your stack of money, pay your cap gains taxes and enjoy your profit! :beer Your situation does sound similar. As for cap gains, I've claimed a homestead exemption on this particular property and lived in one of its units since purchase so my understanding is that I'm exempt from the first 500k...
by MarkNYC
Thu Sep 26, 2019 7:58 pm
Forum: Personal Investments
Topic: Easiest way to split inherited stock with two siblings
Replies: 38
Views: 2107

Re: Easiest way to split inherited stock with two siblings

The executor should have sold the stock shortly after death unless the three of you gave specific written authorization to retain the shares. My advice would be to sell them now and distribute cash. Gill Gill, Sale by the executor is certainly the easiest route, but the OP said "...MIL had a will t...
by MarkNYC
Sun Sep 22, 2019 10:19 pm
Forum: Personal Investments
Topic: IRA Rollover forms
Replies: 6
Views: 330

Re: IRA Rollover forms

I understand an IRA withdrawal payable to me generates a 1099R from that custodian. Do I need to file anything if I deposit the proceeds into another IRA? If you get a check actually payable to boater07 then you will need to report the amount on line 4a of your 1040 form. If that money gets into an...
by MarkNYC
Sun Sep 22, 2019 9:46 pm
Forum: Personal Investments
Topic: IRA Rollover forms
Replies: 6
Views: 330

Re: IRA Rollover forms

How does the receiving cust know it's a rollover? If you're sending them a personal check they don't really. Even if you tell them, they're taking it on trust. But you'll get Form 5498 from both the old and new IRAs showing you took $X out of A and put $X in B. Save those forms in case the IRS ever...
by MarkNYC
Wed Sep 18, 2019 2:52 pm
Forum: Personal Finance (Not Investing)
Topic: Help for mother-in-law: Is NYS retirement income taxable in Colorado?
Replies: 13
Views: 1111

Re: Help for mother-in-law: Is NYS retirement income taxable in Colorado?

Yes, even though she would be changing domicile to CO as of Oct 15, NY through an audit could claim she is taxable to NY for the full 12 months as a statutory resident since she would have maintained a residence in NY for 12 months and assuming she spent more than 183 days in NY during the year. If...
by MarkNYC
Wed Sep 18, 2019 1:41 pm
Forum: Personal Finance (Not Investing)
Topic: Help for mother-in-law: Is NYS retirement income taxable in Colorado?
Replies: 13
Views: 1111

Re: Help for mother-in-law: Is NYS retirement income taxable in Colorado?

This goes toward my last question of how her income taxes for 2019 will work. Can she be considered living in NY state for the full year if she moves Oct 15 but still owns two apartments from Oct 15-Dec 31 (one in NY and one in Colorado)? Given that quote, I'm guessing it's ok to consider all of 20...
by MarkNYC
Wed Sep 18, 2019 1:22 pm
Forum: Personal Finance (Not Investing)
Topic: Help for mother-in-law: Is NYS retirement income taxable in Colorado?
Replies: 13
Views: 1111

Re: Help for mother-in-law: Is NYS retirement income taxable in Colorado?

Pension income from NY government retirement plans is exempt from NY tax (items b and c). In addition, if over age 59 1/2 the taxpayer is entitled to an annual exclusion of up to $20K on IRA or other pension income. If the age requirement was met and this exclusion against IRA income was not claime...
by MarkNYC
Wed Sep 18, 2019 11:44 am
Forum: Personal Finance (Not Investing)
Topic: Help for mother-in-law: Is NYS retirement income taxable in Colorado?
Replies: 13
Views: 1111

Re: Help for mother-in-law: Is NYS retirement income taxable in Colorado?

This goes toward my last question of how her income taxes for 2019 will work. Can she be considered living in NY state for the full year if she moves Oct 15 but still owns two apartments from Oct 15-Dec 31 (one in NY and one in Colorado)? Given that quote, I'm guessing it's ok to consider all of 20...
by MarkNYC
Wed Sep 18, 2019 11:36 am
Forum: Personal Finance (Not Investing)
Topic: Help for mother-in-law: Is NYS retirement income taxable in Colorado?
Replies: 13
Views: 1111

Re: Help for mother-in-law: Is NYS retirement income taxable in Colorado?

My mother-in-law is retired and planning to move from NYS to Colorado next month. This decision happened recently. I manage her money and am trying to figure out some stuff. She currently receives the following yearly income reported on 1099Rs: a) Vanguard IRA + others = $25K b) NYS and Local Retir...
by MarkNYC
Sun Sep 15, 2019 5:59 pm
Forum: Personal Finance (Not Investing)
Topic: does new york phase out business deductions for high earners
Replies: 1
Views: 261

Re: does new york phase out business deductions for high earners

NY does not phase-out Schedule C deductions. If not already aware, you should know that NY City has an Unincorporated Business Tax (UBT). A NY City-based sole proprietorship (Schedule C) with gross income over $95K requires the filing of UBT form NYC-202 and may result in tax up to 4% on net busines...
by MarkNYC
Wed Sep 04, 2019 3:29 pm
Forum: Personal Finance (Not Investing)
Topic: How to deal with 401k over-contribution (leaving excess in plan?)
Replies: 39
Views: 1733

Re: How to deal with 401k over-contribution

Excess pre-tax deferrals and earnings are reported on Form 1040, Schedule 1, Line 21, Other income. This is reported for the tax year of the excess deferral. I believe the instructions are to write excess deferrals/earnings on the available space on Line 21. That is not correct. Excess elective def...
by MarkNYC
Wed Sep 04, 2019 3:03 pm
Forum: Personal Finance (Not Investing)
Topic: How to deal with 401k over-contribution (leaving excess in plan?)
Replies: 39
Views: 1733

Re: How to deal with 401k over-contribution

Could I ask: what line on the 1040 did TaxAct add in your excess as “Additional Income”? And did you add any sort of note (or code) explaining what this amount was for (to help the IRS connect-the-dots between the excess contributed per your W-2s and this “additional income “ amount, so they know y...
by MarkNYC
Wed Sep 04, 2019 2:13 pm
Forum: Personal Finance (Not Investing)
Topic: How to deal with 401k over-contribution (leaving excess in plan?)
Replies: 39
Views: 1733

Re: How to deal with 401k over-contribution

Could I ask: what line on the 1040 did TaxAct add in your excess as “Additional Income”? And did you add any sort of note (or code) explaining what this amount was for (to help the IRS connect-the-dots between the excess contributed per your W-2s and this “additional income “ amount, so they know y...
by MarkNYC
Sun Sep 01, 2019 9:12 pm
Forum: Personal Finance (Not Investing)
Topic: Value of mis-claiming Child on Taxes?
Replies: 15
Views: 1744

Re: Value of mis-claiming Child on Taxes?

"unwinding" is really simple: the ex needs to file an amended return. Piece of cake. Maybe not that simple. Having the ex file an amended return is just the first step. If the amended return is filed this week, it could take 8 - 12 weeks or longer before the IRS receives and fully processes that re...
by MarkNYC
Sun Sep 01, 2019 6:16 pm
Forum: Personal Finance (Not Investing)
Topic: Value of mis-claiming Child on Taxes?
Replies: 15
Views: 1744

Re: Value of mis-claiming Child on Taxes?

Claiming dependents on a tax return is not a matter of deciding who benefits the most. IRS has very specific rules determining who can claim a dependent. If the party meeting the standard does not claim the dependent, then no one else is entitled to do so. But one of those rules is that divorced pa...
by MarkNYC
Wed Aug 28, 2019 12:49 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated quarterly taxes for newly-formed LLC
Replies: 8
Views: 502

Re: Estimated quarterly taxes for newly-formed LLC

Because you're really paying personal income tax in your situation, as noted upthread, there are estimated tax safe harbor rules that don't reduce your total tax, but prevent you from having to pay an underwithholding penalty. (Yes, estimated quarterly tax payments that end up having been too low a...
by MarkNYC
Sun Aug 25, 2019 2:43 pm
Forum: Personal Finance (Not Investing)
Topic: Do I Want My Rental to be a Qualified Joint Venture?
Replies: 11
Views: 788

Re: Do I Want My Rental to be a Qualified Joint Venture?

The webpage you referenced is specifically for self-employed Qualified Joint Ventures. Qualified Joint Ventures do apply to Schedule E. See Schedule E Instructions, page E-2, Qualified Joint Venture. I did make a small error and MarkNYC didn't catch it. Probably because we are far more used to seei...
by MarkNYC
Sat Aug 24, 2019 12:33 pm
Forum: Personal Finance (Not Investing)
Topic: LLC owns rental property - can spouse get SEP or solo 401k from positive cash flow?
Replies: 14
Views: 1436

Re: LLC owns rental property - can spouse get SEP or solo 401k from positive cash flow?

Static rental income by itself on a small scale is far more problematic in establishing that you are in the business of real estate receiving Schedule C business income and not simply receiving passive or even active Schedule E rental income. There's actually no such category as "active Schedule E ...
by MarkNYC
Sat Aug 24, 2019 10:22 am
Forum: Personal Finance (Not Investing)
Topic: Do I Want My Rental to be a Qualified Joint Venture?
Replies: 11
Views: 788

Re: Do I Want My Rental to be a Qualified Joint Venture?

QJV is simply a filing status election to make it far easier for a two spouse only tax filing of joint rental income or joint self-employment income instead of the much more complex partner ship rules and tax filing. ... If there is really no consequence other than not having to do a 1065 and K-1 i...
by MarkNYC
Tue Aug 13, 2019 5:29 pm
Forum: Personal Finance (Not Investing)
Topic: Taxes on sale of home
Replies: 1
Views: 558

Re: Taxes on sale of home

The depreciation allowable during the 3-year rental period will reduce the basis in the property, causing an increase in the gain upon sale. The portion of the gain attributable to depreciation taken is not eligible for the principal residence exclusion, so that specific portion of the profit will b...
by MarkNYC
Thu Aug 08, 2019 8:34 pm
Forum: Personal Finance (Not Investing)
Topic: Tax implications of Calvert settlement distribution
Replies: 9
Views: 3343

Re: Tax implications of Calvert settlement distribution

You should cash the checks, which represent taxable income. You will almost certainly not receive a 1099 for these payments. The stub or letter that accompanied the check may have indicated if any portion of the payment represented interest. For any amount not designated as interest, I would report ...