Search found 1359 matches

by MarkNYC
Fri Sep 21, 2018 11:24 am
Forum: Personal Finance (Not Investing)
Topic: Estate Planning Attorney Says Putting tIRA in a Revocable Trust is "Complicated" - True?
Replies: 41
Views: 2374

Re: Estate Planning Attorney Says Putting tIRA in a Revocable Trust is "Complicated" - True?

It sounds like the op is asking about transferring the IRA into the revocable trust while he is alive. In other words, making the revocable trust the owner of the IRA, not the beneficiary of the IRA. That's a legal question, but I doubt it would be allowed.
by MarkNYC
Fri Sep 21, 2018 10:40 am
Forum: Personal Finance (Not Investing)
Topic: IRS Late payment interest
Replies: 2
Views: 305

Re: IRS Late payment interest

You could have chosen to include the interest along with the $27K tax payment. Since you did not do that, you should now wait for the assessment of interest and late payment penalty, and respond with a payment of the interest and a request for penalty abatement.
by MarkNYC
Mon Sep 17, 2018 3:47 pm
Forum: Personal Finance (Not Investing)
Topic: Amended tax return problem 1040x
Replies: 7
Views: 343

Re: Amended tax return problem 1040x

There are a couple of issues to consider. First, if you "forgot" to deduct the IRA contribution on your original tax return, I take that to mean you did not file a Form 8606 to reflect the nondeductible contribution, in which case you should file the 8606 with the 2nd amended return. Second, return...
by MarkNYC
Mon Sep 17, 2018 2:27 pm
Forum: Personal Finance (Not Investing)
Topic: Amended tax return problem 1040x
Replies: 7
Views: 343

Re: Amended tax return problem 1040x

There are a couple of issues to consider. First, if you "forgot" to deduct the IRA contribution on your original tax return, I take that to mean you did not file a Form 8606 to reflect the nondeductible contribution, in which case you should file the 8606 with the 2nd amended return. Second, returni...
by MarkNYC
Fri Sep 07, 2018 11:58 am
Forum: Personal Finance (Not Investing)
Topic: Trying to decide if a trust should be an IRA beneficiary - Is this case the Yes? or No?
Replies: 9
Views: 754

Re: Trying to decide if a trust should be an IRA beneficiary - Is this case the Yes? or No?

The will places all of the other assets into the trust. I am listed as the sole trustee and beneficiary of the trust. Remainder beneficiaries are my children. As trustee, I have full control over the investment portfolio of the trust and have the ability to take out up to 100 percent of the trust i...
by MarkNYC
Fri Aug 31, 2018 2:37 pm
Forum: Personal Finance (Not Investing)
Topic: Passing on Long Term losses to heirs
Replies: 8
Views: 575

Re: Passing on Long Term losses to heirs

Capital losses realized by an individual expire in the year of the individual's death. Is there an expiration date if the losses were realized after death, such as when a house is sold for less than its appraisal? For what it's worth, the estate would go to a trust that will not close down for seve...
by MarkNYC
Fri Aug 31, 2018 1:32 pm
Forum: Personal Finance (Not Investing)
Topic: Passing on Long Term losses to heirs
Replies: 8
Views: 575

Re: Passing on Long Term losses to heirs

Capital losses realized by an individual expire in the year of the individual's death.
by MarkNYC
Fri Aug 31, 2018 10:54 am
Forum: Personal Finance (Not Investing)
Topic: QCDs from RMD - 1099R [Qualified Charitable Distributions]
Replies: 44
Views: 1743

Re: QCDs from RMD - 1099R [Qualified Charitable Distributions]

I am not comfortable either. BUT it is hard to imagine that all those major brokerages allow QCD check writing by IRA owners without getting some kind of regulatory understanding. I'm not sure the brokerages would care one way or another. I don't think their 1099-R reporting would change regardless...
by MarkNYC
Fri Aug 31, 2018 10:42 am
Forum: Personal Finance (Not Investing)
Topic: QCDs from RMD - 1099R [Qualified Charitable Distributions]
Replies: 44
Views: 1743

Re: QCDs from RMD - 1099R [Qualified Charitable Distributions]

I think those major brokerages and mutual fund companies very likely received some kind of IRS blessing before allowing check writing by IRA owners. The money comes from the IRA directly to a qualified charity. I think the key point is that the money must not go thru another person. Huey, I underst...
by MarkNYC
Fri Aug 31, 2018 8:46 am
Forum: Personal Finance (Not Investing)
Topic: QCDs from RMD - 1099R [Qualified Charitable Distributions]
Replies: 44
Views: 1743

Re: QCDs from RMD - 1099R [Qualified Charitable Distributions]

Writing checks might not qualify. IRC section 408(d)(8) defines a QCD as a distribution from an IRA that satisfies 2 criteria: 1. Paid after the IRA owner reaches age 70.5, and 2. " made directly by the trustee to an organization described in section 170(b)(1)(A )" Writing a check from a fund in th...
by MarkNYC
Thu Aug 30, 2018 8:20 pm
Forum: Personal Finance (Not Investing)
Topic: Relative Never Took RMDs on Inherited IRA From 2004
Replies: 31
Views: 4620

Re: Relative Never Took RMDs on Inherited IRA From 2004

by MarkNYC » Thu Aug 30, 2018 4:15 pm "You say you received two letters from the IRS granting your penalty waiver request. What you did not say is whether the IRS waiver letters were accompanied by a refund of the the penalty tax you voluntarily sent in with the filing of the 5329 Forms. Can you cl...
by MarkNYC
Thu Aug 30, 2018 6:46 pm
Forum: Personal Finance (Not Investing)
Topic: QCDs from RMD - 1099R [Qualified Charitable Distributions]
Replies: 44
Views: 1743

Re: QCDs from RMD - 1099R [Qualified Charitable Distributions]

Vanguard does it that way also. For example, in 2017 on my IRA 1099R my entire distribution is shown as "taxable" while half of it was actually QCDs. Some of the QCDs were submitted to the charity with checks from Vanguard and the rest were donated by IRA checks I wrote . (emphasis added) Wow! This...
by MarkNYC
Thu Aug 30, 2018 6:15 pm
Forum: Personal Finance (Not Investing)
Topic: Relative Never Took RMDs on Inherited IRA From 2004
Replies: 31
Views: 4620

Re: Relative Never Took RMDs on Inherited IRA From 2004

Then my accountant completed 2 separate 5329 forms, one for 2016 and one for 2017... I wrote out two separate hefty checks (one for each year) and sent them in. In searching on this forum, and elsewhere and hearing from my accountant, I was under the impression I was likely to only hear from the IR...
by MarkNYC
Thu Aug 30, 2018 8:25 am
Forum: Personal Finance (Not Investing)
Topic: 2nd home - capital loss or personal loss?
Replies: 8
Views: 1009

Re: 2nd home - capital loss or personal loss?

htdrag11 wrote:
Thu Aug 30, 2018 6:47 am
Well, sounds like his SO could take the $50k loss. Thanks.
There was nothing in my answer that suggested his SO as co-owner could deduct her half of the nondeductible personal loss -- she cannot.
by MarkNYC
Wed Aug 29, 2018 7:52 pm
Forum: Personal Finance (Not Investing)
Topic: 2nd home - capital loss or personal loss?
Replies: 8
Views: 1009

Re: 2nd home - capital loss or personal loss?

It's a nondeductible personal loss, therefore no tax benefits.
by MarkNYC
Wed Aug 29, 2018 7:48 pm
Forum: Personal Finance (Not Investing)
Topic: excess deduction pass-thru from schedule K-1
Replies: 7
Views: 571

Re: excess deduction pass-thru from schedule K-1

To clarify further, the question is whether beneficiary's share of final year deductions can still be included in beneficiary's itemized deductions, and if so what is the limitation. I am trying to go through the text of the Tax Cut and Jobs Act which is not a trivial task. Starting in 2018, miscel...
by MarkNYC
Tue Aug 28, 2018 3:50 pm
Forum: Personal Finance (Not Investing)
Topic: Unexpected 2014 IRS refund
Replies: 11
Views: 770

Re: Unexpected 2014 IRS refund

...One reason I thought of for why there might have been an exception was that the IRS had been in contact with him about this return starting before April 17, 2018. He had originally paid $500 along with (possibly) an extension to file form, back in April 2015. They had in 2017 started to contact ...
by MarkNYC
Sat Aug 25, 2018 9:55 am
Forum: Personal Finance (Not Investing)
Topic: IRA inherited from younger spouse
Replies: 25
Views: 2521

Re: IRA inherited from younger spouse

Clearly, the best decision in this example is for the surviving spouse (age 84) to elect to assume ownership of the inherited IRA. 1) The RMDs will be lower, they start lower and stay lower. The key is that the owner passed AFTER their RBD, and in that case the life expectancy used is the longer of...
by MarkNYC
Fri Aug 24, 2018 8:56 pm
Forum: Personal Finance (Not Investing)
Topic: K-1 1120S Income Vs. Distribution
Replies: 4
Views: 274

Re: K-1 1120S Income Vs. Distribution

JStephens wrote:
Fri Aug 24, 2018 4:13 pm
Keep in mind there's a guarantee payment field, which is basically the paycheck.
You may be thinking about partnerships. There is no guaranteed payment field for S Corporation K-1s.
by MarkNYC
Fri Aug 24, 2018 3:47 pm
Forum: Personal Finance (Not Investing)
Topic: IRA inherited from younger spouse
Replies: 25
Views: 2521

Re: IRA inherited from younger spouse

Clearly, the best decision in this example is for the surviving spouse (age 84) to elect to assume ownership of the inherited IRA. 1) The RMDs will be lower, they start lower and stay lower. The key is that the owner passed AFTER their RBD, and in that case the life expectancy used is the longer of...
by MarkNYC
Fri Aug 24, 2018 3:14 pm
Forum: Personal Finance (Not Investing)
Topic: Wrong Tax estimate on liquidation of beneficiary's non-qualified variable annuity?
Replies: 2
Views: 201

Re: Wrong Tax estimate on liquidation of beneficiary's non-qualified variable annuity?

Here's my guess. With nonqualified annuities, in some situations earnings come out first, and in others each withdrawal contains a combination of earnings and a return of basis. The tax-free portion, or exclusion ratio, appears to be 72% (181/252). While you said the previous distributions of $43K w...
by MarkNYC
Fri Aug 24, 2018 1:21 pm
Forum: Personal Finance (Not Investing)
Topic: Taxes on capital gain
Replies: 17
Views: 1226

Re: Taxes on capital gain

For federal taxes, if your withholding falls $30K short of 110% of prior year tax, and you expect to owe an additional $150K of tax, you have these choices: 1. Wait until April 15 to pay the full $150K. The penalty would be around $800. 2. Make a 4th quarter estimated tax payment of $30K on Jan 15t...
by MarkNYC
Fri Aug 24, 2018 1:04 pm
Forum: Personal Finance (Not Investing)
Topic: Taxes on capital gain
Replies: 17
Views: 1226

Re: Taxes on capital gain

For federal taxes, if your withholding falls $30K short of 110% of prior year tax, and you expect to owe an additional $150K of tax, you have these choices: 1. Wait until April 15 to pay the full $150K. The penalty would be around $800. 2. Make a 4th quarter estimated tax payment of $30K on Jan 15th...
by MarkNYC
Fri Aug 24, 2018 11:49 am
Forum: Personal Finance (Not Investing)
Topic: IRA inherited from younger spouse
Replies: 25
Views: 2521

Re: IRA inherited from younger spouse

I believe I am correct, but I am not an authority on this. I suggest getting an answer from Alan S, to be certain this is correct. You could also review the IRS Publications. Pub 590-A and 590-B cover IRAs. I would not want you to act based on my memory of the rules and then find out I was wrong. I...
by MarkNYC
Fri Aug 24, 2018 11:22 am
Forum: Personal Finance (Not Investing)
Topic: IRA inherited from younger spouse
Replies: 25
Views: 2521

Re: IRA inherited from younger spouse

There are two other reasons why leaving it as an inherited IRA is NOT the better choice: 1. As an inherited IRA, the RMD divisor would be 11.4 years for age 78 using the Single Life table. As an owner's IRA, the RMD divisor would be 15.5 years for age 84 using the Uniform Lifetime table. So larger R...
by MarkNYC
Thu Aug 23, 2018 3:14 pm
Forum: Personal Finance (Not Investing)
Topic: How amend my tax return for a 2017 IRA rollover
Replies: 11
Views: 516

Re: How amend my tax return for a 2017 IRA rollover

File a form 1040X and explain that you're filing an amended return for an additional 1099-R on line 16A. Utilize all the same before/after #s as on your initial return. I downloaded 1040x, and have two questions: 1. Other than my personal information, do I have to fill 1-15, and Parts I and II, if ...
by MarkNYC
Wed Aug 22, 2018 2:51 pm
Forum: Personal Finance (Not Investing)
Topic: CPA/Account error - who's responsible?
Replies: 24
Views: 2066

Re: CPA/Account error - who's responsible?

If more than 10% of your total federal tax is due with the filing of your extended tax return, then the 1/2% per month late payment penalty will apply, unless there is "reasonable cause" for your not paying on time. Your circumstances should certainly qualify for the abatement. Your accountant shoul...
by MarkNYC
Wed Aug 22, 2018 1:34 pm
Forum: Personal Finance (Not Investing)
Topic: CPA/Account error - who's responsible?
Replies: 24
Views: 2066

Re: CPA/Account error - who's responsible?

We're not disputing the recast numbers, this issue is that because of the delay in filing, we're now hit with penalties and interest of low 5 figures. Do they have any liability towards the penalty/interest because of the late extension? Assuming we're just discussing IRS issues, a few penalty-rela...
by MarkNYC
Tue Aug 21, 2018 3:55 pm
Forum: Personal Finance (Not Investing)
Topic: NOL Carryover from Trust - Where/How to Claim Them
Replies: 6
Views: 409

Re: NOL Carryover from Trust - Where/How to Claim Them

On 2017 tax forms, you would list the NOL carryover amount as a negative on line 21 of Form 1040; and then list the regular NOL and AMT NOL amounts on lines 10 and 11 respectively of AMT Form 6251. Thank you MarkNYC. I really appreciate your help. To be sure I understand correctly, is the negative ...
by MarkNYC
Tue Aug 21, 2018 8:53 am
Forum: Personal Finance (Not Investing)
Topic: NOL Carryover from Trust - Where/How to Claim Them
Replies: 6
Views: 409

Re: NOL Carryover from Trust - Where/How to Claim Them

On 2017 tax forms, you would list the NOL carryover amount as a negative on line 21 of Form 1040; and then list the regular NOL and AMT NOL amounts on lines 10 and 11 respectively of AMT Form 6251.
by MarkNYC
Sun Aug 19, 2018 6:12 pm
Forum: Personal Finance (Not Investing)
Topic: How to Treat "Negative" Basis in Nondeductible IRA
Replies: 52
Views: 2523

Re: How to Treat "Negative" Basis in Nondeductible IRA

I disagree with the premise that if Form 8606 is filed to report a Roth conversion in Part II or a Roth Distribution in Part III, and traditional IRA basis is inadvertently omitted from line 2 of Part I, that results in the basis being permanently extinguished or lost. An amended Form 8606 can alway...
by MarkNYC
Sat Aug 18, 2018 2:35 pm
Forum: Personal Finance (Not Investing)
Topic: How to Treat "Negative" Basis in Nondeductible IRA
Replies: 52
Views: 2523

Re: How to Treat "Negative" Basis in Nondeductible IRA

So what happens if you put $6500 in a traditional non deductible, it falls to $6000, and you do a Roth conversion? Do you have an $500 ordinary income loss upon conversion? I know if you convert higher than your contribution you will have ordinary income. As I mentioned previously above, prior to 2...
by MarkNYC
Sat Aug 18, 2018 1:59 pm
Forum: Personal Finance (Not Investing)
Topic: How to Treat "Negative" Basis in Nondeductible IRA
Replies: 52
Views: 2523

Re: How to Treat "Negative" Basis in Nondeductible IRA

Suppose you do backdoor Roths every year. One year you forget to convert right away and the $5,500 drops to $5,000. Your basis (non-deductible contribution) is still 5.500. If you convert the $5,000 to Roth, then you will have a negative basis remaining (5,000 conversion minus its basis of 5,500). ...
by MarkNYC
Sat Aug 18, 2018 9:11 am
Forum: Personal Finance (Not Investing)
Topic: How to Treat "Negative" Basis in Nondeductible IRA
Replies: 52
Views: 2523

Re: How to Treat "Negative" Basis in Nondeductible IRA

I agree with retiredjg, that there is no such thing as negative basis in an IRA. Prior to 2018, if basis remained after the IRA account(s) were fully distributed, the unrecovered basis could be deducted as a "loss", on Schedule A as a miscellaneous itemized deduction.
by MarkNYC
Tue Aug 14, 2018 11:22 am
Forum: Personal Finance (Not Investing)
Topic: No one seems to have an answer - NIIT on Short Term Cap Gains
Replies: 10
Views: 783

Re: No one seems to have an answer - NIIT on Short Term Cap Gains

The instructions to Net Investment Income Tax Form 8960 are quite clear that capital gains (which includes both short-term and long-term) are subject to NIIT. I'm curious what the rationale would be to believe differently? I think the heart of my question actually arises from the treatment of ISOs ...
by MarkNYC
Tue Aug 14, 2018 8:30 am
Forum: Personal Finance (Not Investing)
Topic: No one seems to have an answer - NIIT on Short Term Cap Gains
Replies: 10
Views: 783

Re: No one seems to have an answer - NIIT on Short Term Cap Gains

The instructions to Net Investment Income Tax Form 8960 are quite clear that capital gains (which includes both short-term and long-term) are subject to NIIT.

I'm curious what the rationale would be to believe differently?
by MarkNYC
Wed Aug 08, 2018 8:35 pm
Forum: Investing - Help with Personal Investments
Topic: Help please - Received IRS tax notice CP2000
Replies: 11
Views: 1143

Re: Help please - Received IRS tax notice CP2000

Thanks, big apple for your thoughtful responses. Good suggestion. I am going to use my CPA to straighten things out. Would be "worthit" for me. Yes, these numbers relate to 2016. Hopefully, the following will shed some additional light as I might have missed some information in my earlier posts: In...
by MarkNYC
Wed Aug 08, 2018 7:31 pm
Forum: Investing - Help with Personal Investments
Topic: Help please - Received IRS tax notice CP2000
Replies: 11
Views: 1143

Re: Help please - Received IRS tax notice CP2000

veindoc wrote:
Wed Aug 08, 2018 2:15 pm
File an amended federal return for 2017 with tax and penalty due.
There will be tax plus interest. There should be no penalty.
by MarkNYC
Wed Aug 08, 2018 3:52 pm
Forum: Investing - Help with Personal Investments
Topic: Help please - Received IRS tax notice CP2000
Replies: 11
Views: 1143

Re: Help please - Received IRS tax notice CP2000

Form 1099-B shows gross proceeds from the sale of securities or bond redemptions. When the sales are not reported on the tax return, the IRS computer matching program will typically assume zero basis for the sales and assume short-term gain when calculating the proposed change to tax on a CP-2000 no...
by MarkNYC
Sat Aug 04, 2018 12:30 pm
Forum: Personal Finance (Not Investing)
Topic: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?
Replies: 75
Views: 5127

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

The individual is entitled to a charitable deduction on his personal tax return when he makes the donation to the Donor Advised Fund, not when the Fund makes the specific grant to the charitable organization, which could be one or more years after the original donation. It would be the responsibilit...
by MarkNYC
Fri Aug 03, 2018 4:05 pm
Forum: Personal Finance (Not Investing)
Topic: Capital gain, safe harbor rule, AMT: advice
Replies: 22
Views: 1095

Re: Capital gain, safe harbor rule, AMT: advice

.. let's assume that one person has paid $100k in 2017 in taxes (AGI > $150k). Suppose that the same person in 2018 withheld, through W2 , another $100k equally spread throughout the year. So, this person is not satisfying the safe harbor rule, because he/she fell short of $10k (let's assume 2018 A...
by MarkNYC
Fri Aug 03, 2018 11:33 am
Forum: Personal Finance (Not Investing)
Topic: Capital gain, safe harbor rule, AMT: advice
Replies: 22
Views: 1095

Re: Capital gain, safe harbor rule, AMT: advice

................................................................... The same principle applies to CA, except that CA always uses 100% of prior year tax, and CA requires 70% of required estimated tax paid through the 2nd quarter rather than 50%, with zero due for 3rd quarter. Mark........looks like ...
by MarkNYC
Fri Aug 03, 2018 10:45 am
Forum: Personal Finance (Not Investing)
Topic: Capital gain, safe harbor rule, AMT: advice
Replies: 22
Views: 1095

Re: Capital gain, safe harbor rule, AMT: advice

In order to avoid a penalty, you have the option of paying 110% of prior year tax or 90% of current year tax. If estimated payments are required, they must be paid in equal quarterly amounts, except that if paying 90% of current year tax and income is uneven, payment amounts can be uneven based on t...
by MarkNYC
Wed Jul 11, 2018 4:09 pm
Forum: Investing - Help with Personal Investments
Topic: Must I submit a revised tax return?
Replies: 23
Views: 1893

Re: Must I submit a revised tax return?

Let's assume the IRS has no record of the additional income from a corrected 1099. You acknowledge there is no legal requirement to file an amended return, but claim there's a legal obligation to pay the additional tax that would be due if an amended return was filed? I disagree. Without an amended...
by MarkNYC
Wed Jul 11, 2018 3:49 pm
Forum: Investing - Help with Personal Investments
Topic: Must I submit a revised tax return?
Replies: 23
Views: 1893

Re: Must I submit a revised tax return?

Let's assume the IRS has no record of the additional income from a corrected 1099. You acknowledge there is no legal requirement to file an amended return, but claim there's a legal obligation to pay the additional tax that would be due if an amended return was filed? I disagree. Without an amended...
by MarkNYC
Wed Jul 11, 2018 2:35 pm
Forum: Investing - Help with Personal Investments
Topic: Must I submit a revised tax return?
Replies: 23
Views: 1893

Re: Must I submit a revised tax return?

If a corrected 1099 is submitted the IRS and state might adjust your return and send you a refund anyway. The IRS will not do that. The IRS does routinely do this. I have clients that get the checks. Heck, I just cashed one today for myself. I have never seen or heard of this. Can you provide some ...
by MarkNYC
Wed Jul 11, 2018 12:54 pm
Forum: Investing - Help with Personal Investments
Topic: RMD from Inherited IRA
Replies: 12
Views: 1330

Re: RMD from Inherited IRA

14.6 is the correct divisor for 2018. ..Therefore, there has been a small shortfall in the RMD for 2015-2017 which needs to be made up. Then a 5329 should be filed for those years requesting the penalty waiver. The 5329 can be filed by itself and no 1040 X is needed. Alan, The OP has indicated an a...
by MarkNYC
Wed Jul 11, 2018 12:01 pm
Forum: Investing - Help with Personal Investments
Topic: Must I submit a revised tax return?
Replies: 23
Views: 1893

Re: Must I submit a revised tax return?

You are under no obligation to amend a return if it’s in the government’s favor. They appreciate your donation. There is no legal obligation to file an amended tax return, regardless of whether the amended return would result in you owing more to the IRS or the IRS owing you a refund. There is no l...
by MarkNYC
Wed Jul 11, 2018 11:18 am
Forum: Investing - Help with Personal Investments
Topic: Must I submit a revised tax return?
Replies: 23
Views: 1893

Re: Must I submit a revised tax return?

If a corrected 1099 is submitted the IRS and state might adjust your return and send you a refund anyway. The IRS will not do that. The IRS does routinely do this. I have clients that get the checks. Heck, I just cashed one today for myself. I have never seen or heard of this. Can you provide some ...
by MarkNYC
Wed Jul 11, 2018 9:29 am
Forum: Investing - Help with Personal Investments
Topic: Must I submit a revised tax return?
Replies: 23
Views: 1893

Re: Must I submit a revised tax return?

If a corrected 1099 is submitted the IRS and state might adjust your return and send you a refund anyway. The IRS will not do that. The IRS does routinely do this. I have clients that get the checks. Heck, I just cashed one today for myself. I have never seen or heard of this. Can you provide some ...