Search found 1418 matches

by MarkNYC
Mon Jan 14, 2019 7:56 pm
Forum: Personal Finance (Not Investing)
Topic: SEP IRA vs Solo 401k - What am I not getting?
Replies: 28
Views: 1003

Re: SEP IRA vs Solo 401k - What am I not getting?

If I understand correctly, the solo 401k is better than a SEP IRA in nearly every way. Particularly with contribution limits. So why would anyone open a SEP IRA? Or am I missing something? I don't think you are missing anything. I do not understand why SEP IRA's exist. There is one big difference, ...
by MarkNYC
Sat Jan 12, 2019 10:31 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated tax penalty exceptions [ACA premium underpayment penalty]
Replies: 24
Views: 1248

Re: Estimated tax penalty exceptions

You can get the overcharge refunded by filing an amended return with form 2210. Make the annualized income election and use the worksheet to calculate the interest for three months. You should not file an amended tax return for the sole purpose of requesting a refund or abatement of an underpayment...
by MarkNYC
Sat Jan 12, 2019 1:13 pm
Forum: Personal Finance (Not Investing)
Topic: 2017 State Tax Refunds Federally Taxable in 2018!!!
Replies: 16
Views: 2113

Re: 2017 State Tax Refunds Federally Taxable in 2018!!!

The amount of state tax you deduct in 2018 is not relevant to how much of your 2018 state tax refund is taxable. Generally, with some rare exceptions, if AMT applied in the prior year, then some or all of the state refund is nontaxable. In most cases where AMT exists the full refund is nontaxable. I...
by MarkNYC
Fri Jan 11, 2019 9:32 pm
Forum: Personal Finance (Not Investing)
Topic: Sold out-of-state rental property - How to calculate state taxes?
Replies: 3
Views: 324

Re: Sold out-of-state rental property - How to calculate state taxes?

Without knowing the specifics of your personal tax return, the general answer to your question is yes, you will owe NY the difference.
by MarkNYC
Wed Jan 09, 2019 8:35 pm
Forum: Investing - Help with Personal Investments
Topic: 20% Income Tax from Real Estate
Replies: 1
Views: 290

Re: 20% Income Tax from Real Estate

Rental income from real estate is passive income and is taxed at ordinary income tax rates. It is not taxed at a flat 20% or any other special or reduced rate.
by MarkNYC
Mon Jan 07, 2019 2:05 pm
Forum: Personal Finance (Not Investing)
Topic: Clark Howard looks at new 1040 tax form for 2018
Replies: 28
Views: 3752

Re: Draft 8606 for 2018 taxes

And the IRS is one of the agencies affected by the shutdown. I've read that if you use home tax-prep software to file, it won't really be filed--the tax prep company will just hold your filing until the IRS resumes full operation, and then send it in; store-and-forward. What could possibly go wrong...
by MarkNYC
Sat Jan 05, 2019 10:12 am
Forum: Personal Finance (Not Investing)
Topic: SALT Limitation: Better to claim state sales tax deduction instead of income tax deduction if above the 10k Limit?
Replies: 14
Views: 1896

Re: SALT Limitation: Better to claim state sales tax deduction instead of income tax deduction if above the 10k Limit?

David -- for this to be correct, the $2,000 refund would have to be deemed to have come from the state tax amount that was not deducted rather than the $10,000 that was deducted. I doubt the IRS will accept that viewpoint. Why wouldn't they? The refund is of the last dollars paid, not the first. By...
by MarkNYC
Fri Jan 04, 2019 11:54 pm
Forum: Personal Finance (Not Investing)
Topic: SALT Limitation: Better to claim state sales tax deduction instead of income tax deduction if above the 10k Limit?
Replies: 14
Views: 1896

Re: SALT Limitation: Better to claim state sales tax deduction instead of income tax deduction if above the 10k Limit?

BusterMcTaco wrote:
Fri Jan 04, 2019 11:36 pm
I think grabiner's point is that if you have over $10000 in, say, property tax, then the state income tax provided no deduction.
Could be, but that wasn't how I read it. The term "SALT" deduction does apply to both state income taxes and property taxes.
by MarkNYC
Fri Jan 04, 2019 11:23 pm
Forum: Personal Finance (Not Investing)
Topic: SALT Limitation: Better to claim state sales tax deduction instead of income tax deduction if above the 10k Limit?
Replies: 14
Views: 1896

Re: SALT Limitation: Better to claim state sales tax deduction instead of income tax deduction if above the 10k Limit?

Your state tax refund is only taxable to the extent that you received a tax benefit from it... If you had more than $12,000 in SALT, a $2000 state refund is not taxable, because you gained no benefit. David -- for this to be correct, the $2,000 refund would have to be deemed to have come from the s...
by MarkNYC
Wed Jan 02, 2019 2:06 pm
Forum: Personal Finance (Not Investing)
Topic: Does alimony count as income for IRA
Replies: 15
Views: 1913

Re: Does alimony count as income for IRA

For divorces effective in 2019 (but not before unless amended), alimony is no longer taxable so Pub 590 A is now out of date with respect to alimony being a source of taxable compensation. Alan -- the Pub 590 language does not seem to me to be out date. It does not say that alimony is a source of t...
by MarkNYC
Wed Jan 02, 2019 1:46 pm
Forum: Personal Finance (Not Investing)
Topic: Does alimony count as income for IRA
Replies: 15
Views: 1913

Re: Does alimony count as income for IRA

For divorces effective in 2019 (but not before unless amended), alimony is no longer taxable so Pub 590 A is now out of date with respect to alimony being a source of taxable compensation. Alan -- the Pub 590 language does not seem to me to be out date. It does not say that alimony is a source of t...
by MarkNYC
Mon Dec 31, 2018 2:27 pm
Forum: Personal Finance (Not Investing)
Topic: Last Minute Inherited IRA RMD
Replies: 24
Views: 1558

Re: Last Minute Inherited IRA RMD

Since the IRS rarely acts, probably not worth the effort to make this unnecessarily complicated, particularly since the IRS has never issued detailed guidance on Form 5329 and rarely levies the 50% penalty. Alan -- have you ever seen an instance where the IRS has assessed the 50% penalty tax agains...
by MarkNYC
Sun Dec 30, 2018 6:37 pm
Forum: Personal Finance (Not Investing)
Topic: Last Minute Inherited IRA RMD
Replies: 24
Views: 1558

Re: Last Minute Inherited IRA RMD

Since the IRS rarely acts, probably not worth the effort to make this unnessarily complicated, particularly since the IRS has never issued detailed guidance on Form 5329 and rarely levies the 50% penalty. Alan -- have you ever seen an instance where the IRS has assessed the 50% penalty tax against ...
by MarkNYC
Wed Dec 26, 2018 2:18 pm
Forum: Personal Finance (Not Investing)
Topic: Do I need to report my child's income ($1600)?
Replies: 31
Views: 2912

Re: Do I need to report my child's income ($1600)?

My son worked a while past summer and made $1600. He received a W2 form for it. He is 19 and full-time college student. I claim him as a dependent in my tax return. Do I need to include his earnings ($1600) in my tax return for 2018? If so how? You can never include a dependent child's earned incom...
by MarkNYC
Mon Dec 24, 2018 7:38 pm
Forum: Personal Finance (Not Investing)
Topic: 1040 ES - Non-Equal Payments - ok?
Replies: 24
Views: 1178

Re: 1040 ES - Non-Equal Payments - ok?

This is great info and I've learned a lot. I do have one question though about the official IRS wording on this and my situation in particular. As an earlier poster wrote, the exact quote from IRS.gov said: Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax...
by MarkNYC
Mon Dec 24, 2018 3:09 pm
Forum: Personal Finance (Not Investing)
Topic: Sold a rental property for an "ordinary loss of $70,719" in 2018 - how will this affect taxes?
Replies: 23
Views: 2017

Re: Sold a rental property for an "ordinary loss of $70,719" in 2018 - how will this affect taxes?

Have you also accounted for Depreciation recapture? Why do you believe depreciation recapture will apply if the property is sold at a loss? Are calcing your basis correctly for the $70,719 loss calculation? Your basis is reduced by the amount of depreciation you have taken. Yes, basis must be reduc...
by MarkNYC
Mon Dec 24, 2018 1:51 pm
Forum: Personal Finance (Not Investing)
Topic: Sold a rental property for an "ordinary loss of $70,719" in 2018 - how will this affect taxes?
Replies: 23
Views: 2017

Re: Sold a rental property for an "ordinary loss of $70,719" in 2018 - how will this affect taxes?

stats99 wrote:
Mon Dec 24, 2018 1:36 pm
Have you also accounted for Depreciation recapture?
Why do you believe depreciation recapture will apply if the property is sold at a loss?
by MarkNYC
Mon Dec 24, 2018 1:49 pm
Forum: Personal Finance (Not Investing)
Topic: Sold a rental property for an "ordinary loss of $70,719" in 2018 - how will this affect taxes?
Replies: 23
Views: 2017

Re: Sold a rental property for an "ordinary loss of $70,719" in 2018 - how will this affect taxes?

Did you hold the rental property for longer than one year? If so, that loss is likely a long-term capital loss. Long-term capital losses can be used to offset long-term capital gains (this is not the same thing as your wage income). It will not be taxed as a capital loss. It will be a Sec 1231 loss...
by MarkNYC
Tue Dec 18, 2018 9:33 pm
Forum: Personal Finance (Not Investing)
Topic: Question for IRS workers or Accountants [IRS did not process Form 8606]
Replies: 12
Views: 896

Re: Question for IRS workers or Accountants

If you sent in the corrected 8606 Forms solely to make corrections to IRA basis, and there was no resulting tax change to any year, then what specific action are you expecting from the IRS? Thank you for your question. I was hoping for confirmation that corrected cost bases were recorded. Won't it ...
by MarkNYC
Tue Dec 18, 2018 9:21 pm
Forum: Personal Finance (Not Investing)
Topic: Question for IRS workers or Accountants [IRS did not process Form 8606]
Replies: 12
Views: 896

Re: Question for IRS workers or Accountants

If you sent in the corrected 8606 Forms solely to make corrections to IRA basis, and there was no resulting tax change to any year, then what specific action are you expecting from the IRS?
by MarkNYC
Tue Dec 18, 2018 3:20 pm
Forum: Personal Finance (Not Investing)
Topic: Can I get a quick refund if I file the first week of January
Replies: 10
Views: 1188

Re: Can I get a quick refund if I file the first week of January

Because of a donor advised fund we created and funded this year - my year of retirement - we are expecting a significant refund of approx. $50k. My question is: can I accelerate this refund by filing a return as soon as possible after Jan. 1 even before my employer has filed my W2 and before 1099's...
by MarkNYC
Mon Dec 17, 2018 9:08 pm
Forum: Investing - Help with Personal Investments
Topic: Real estate income for Roth?
Replies: 5
Views: 577

Re: Real estate income for Roth?

More info is needed. Is this is purely passive management is different , if it is an active business it’s different. For the purpose of qualifying for an IRA contribution, it is not different. Regardless of whether the rental income is passive, or nonpassive for a real estate professional, in neith...
by MarkNYC
Fri Dec 14, 2018 10:57 pm
Forum: Personal Finance (Not Investing)
Topic: Avoiding underpayment penalty
Replies: 22
Views: 2107

Re: Avoiding underpayment penalty

What is the penalty if one doesn't meet any of the safe harbors? I think I will have at least paid 90% of what is due, but I"m not positive. The tax law change may throw me off this year. The IRS hasn't published this year's Form 2210, but last year, it was 4% annual interest, prorated by the numbe...
by MarkNYC
Fri Dec 14, 2018 11:32 am
Forum: Personal Finance (Not Investing)
Topic: Gift Tax/ Form 709 Question
Replies: 3
Views: 253

Re: Gift Tax/ Form 709 Question

If anyone else can also share their first-hand experience or knowldge here, particularly if they requested an income tax return transcript the year after filing Form 709 and can verify one way or the other if their gift/ Form 709 was part of the transcript or referenced in some way as part of the t...
by MarkNYC
Wed Dec 12, 2018 4:30 pm
Forum: Personal Finance (Not Investing)
Topic: Received IRS letter - be proactive or sit back?
Replies: 25
Views: 3036

Re: Received IRS letter - be proactive or sit back?

I'd follow the instructions in the letter. I would think that an "investigation" will take place soon, because ex-husband will probably not respond either. At that point, you can make your case that you should be able to claim both children. There's no reason to ignore explicit guidance from the IR...
by MarkNYC
Tue Dec 11, 2018 7:58 pm
Forum: Investing - Help with Personal Investments
Topic: ROTHs and 5-year Penalty
Replies: 10
Views: 943

Re: ROTHs and 5-year Penalty

But now, can I expand a little? Assume same age, same two ROTHS at First Command Bank. But now, I CLOSE those two ROTHs, put the entire cash amounts into a savings account, and go live in a swamp for say 2 years. Then I come back, open a new ROTH at say, Schwab, and start using that money in saving...
by MarkNYC
Fri Dec 07, 2018 2:48 pm
Forum: Personal Consumer Issues
Topic: finding the error in my federal tax return
Replies: 21
Views: 2395

Re: finding the error in my federal tax return

Whew! Got another form letter from the IRS. Short version: amount due $0.00. Nice to know I can still add. Total cost: about an hour of phone/wait time plus two certified/return receipt mailings. No idea what caused the problem . . . they didn't tell me that part. Thanks for the links. Hurray for l...
by MarkNYC
Mon Dec 03, 2018 6:34 pm
Forum: Personal Finance (Not Investing)
Topic: Amended tax return / CP2000
Replies: 3
Views: 337

Re: Amended tax return / CP2000

The IRS determined my basis when I submitted my response to the CP2000, which included the 1099-B I neglected to use when filing. The IRS then sent me a new CP2000, and said if I agreed with their findings, which I did, that I shouldn't file a 1040x. So, sounds like I should just file a 2017 1040x ...
by MarkNYC
Fri Nov 30, 2018 9:47 pm
Forum: Personal Finance (Not Investing)
Topic: Gift tax question
Replies: 175
Views: 6911

Re: Gift tax question

My in-laws have decided to gift 60k before January 1st and 60k after (just because they don't really want to fill out any gift tax forms, and this seems to be perfectly legal, correct?) I’m a Cpa. And if you were my client, we would still do a gift tax return. Even though you’re not using any lifet...
by MarkNYC
Fri Nov 30, 2018 9:19 pm
Forum: Personal Finance (Not Investing)
Topic: Form 709 [Gift tax] for gifting to child
Replies: 21
Views: 1105

Re: Form 709 [Gift tax] for gifting to child

If the amount is between $15k and $30k, then the gift is considered to be split. No, all gifts are considered NOT to be split, UNLESS the donor makes an affirmative gift-splitting election, which includes listing on the gift tax return the name and SSN of the consenting spouse, accompanied by the s...
by MarkNYC
Fri Nov 30, 2018 9:01 pm
Forum: Personal Finance (Not Investing)
Topic: Gift tax question
Replies: 175
Views: 6911

Re: Gift tax question

My in-laws have decided to gift 60k before January 1st and 60k after (just because they don't really want to fill out any gift tax forms, and this seems to be perfectly legal, correct?) I’m a Cpa. And if you were my client, we would still do a gift tax return. Even though you’re not using any lifet...
by MarkNYC
Thu Nov 29, 2018 2:46 pm
Forum: Personal Finance (Not Investing)
Topic: Gift tax question
Replies: 175
Views: 6911

Re: Gift tax question

This kind of brings up a related matter: Just how hard is it to complete a Form 709? I seem to recall hearing that it's actually not easy, hence the lengths that people go to, often posted here, from having to do one, and remain in compliance with tax law. I understand that mentioning here accompli...
by MarkNYC
Wed Nov 28, 2018 5:17 pm
Forum: Personal Finance (Not Investing)
Topic: Gift tax question
Replies: 175
Views: 6911

Re: Gift tax question

tadamsmar wrote:
Wed Nov 28, 2018 4:34 pm
Looks like you are supposed to file a 709 even for gifts under $15,000 per year. Who does that?
If you did not give more than $15,000 to any one individual then you are not required to file.
by MarkNYC
Wed Nov 28, 2018 4:23 pm
Forum: Personal Finance (Not Investing)
Topic: Gift tax question
Replies: 175
Views: 6911

Re: Gift tax question

Your parents can gift you 60K and only put the other 70K on the tax return. If a gift is made to an individual in an amount in excess of the annual exclusion, then the full amount of the gift must be reported on the gift tax return, with the allowable annual exclusion amount backed-out on page 3 of...
by MarkNYC
Tue Nov 27, 2018 7:40 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard email : Conversions to Roth IRAs can no longer be reversed
Replies: 10
Views: 1010

Re: Vanguard email : Conversions to Roth IRAs can no longer be reversed

I really don't understand what they were trying to accomplish by killing recharacterizations, I mean, so many things can be missed or not known 100% that might make you want to undo some or part of a Roth conversation, I just don't see why this was changed. My guess is that Congress decided to disa...
by MarkNYC
Sun Nov 25, 2018 4:53 pm
Forum: Investing - Help with Personal Investments
Topic: Can I over-contribute to 401k plan between 2 employers in anticipation of HCE refund from old employer?
Replies: 15
Views: 797

Re: Can I over-contribute to 401k plan between 2 employers in anticipation of HCE refund from old employer?

I don't think your idea will work, and you might end up with some unwanted IRS correspondence. Let's say you expect a $2,500 repayment from employer A due to your HCE status, so you defer an amount with employer B that puts you $2,500 over the annual dollar limit for 401K deferrals. You end up with ...
by MarkNYC
Wed Nov 21, 2018 9:42 am
Forum: Personal Finance (Not Investing)
Topic: Real estate capital gains - advice needed
Replies: 10
Views: 1269

Re: Real estate capital gains - advice needed

Yes, you should file an IL tax return. If there is a gain on the sale, you would need to file the IL tax return to pay the tax on the IL-source gain. Even if no gain on the sale, a Form 1099-S should be filed reporting the sale. There are several parties that might file the form so you can never be ...
by MarkNYC
Tue Nov 20, 2018 9:26 am
Forum: Investing - Help with Personal Investments
Topic: This is why I need a tax accountant
Replies: 17
Views: 2437

Re: This is why I need a tax accountant

RickBoglehead wrote:
Mon Nov 19, 2018 10:39 am
A rollover is not a contribution... Hence the term "rollover".
A rollover is a specific type of IRA contribution. The IRA custodian uses Box 2 of Form 5498 to report the individual's "Rollover contributions" for the year.
by MarkNYC
Wed Nov 14, 2018 6:59 pm
Forum: Personal Finance (Not Investing)
Topic: Does it ever make sense to pay more tax intentionally?
Replies: 15
Views: 1702

Re: Does it ever make sense to pay more tax intentionally?

I believe the IRS has a longstanding policy that individuals are not required to take allowable deductions on their tax return, with 2 exceptions: 1. Allowable deductions must be taken when they affect self-employment income, and thereby affect future social security benefits 2. Allowable deductions...
by MarkNYC
Mon Nov 12, 2018 10:44 am
Forum: Personal Finance (Not Investing)
Topic: which way is simpler if NOL
Replies: 8
Views: 592

Re: which way is simpler if NOL

Under the new tax law, individuals (except certain farmers) who generate Net Operating Losses after 2017 can no longer carry the loss back. The NOL must be carried forward.
by MarkNYC
Fri Nov 02, 2018 11:49 am
Forum: Personal Finance (Not Investing)
Topic: 1040X Amended tax return-where to put 1099-R distribution CD "J"??
Replies: 4
Views: 231

Re: 1040X Amended tax return-where to put 1099-R distribution CD "J"??

Code J on the 1099-R indicates an early distribution from a Roth IRA. The IRS would like to know why none of the distribution is taxable and/or subject to the 10% early distribution penalty.

You should complete Part III of Form 8606, and file it with the requested amended return Form 1040X.
by MarkNYC
Fri Oct 26, 2018 10:18 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA earned income qualifying period
Replies: 9
Views: 918

Re: ROTH IRA earned income qualifying period

Rollovers are not contributions. I think it's more accurate to say that a rollover to a Roth IRA is a specific type of contribution, distinct from a regular/annual contribution or a conversion contribution. IRA custodians use box 2 of Form 5498 to report the amount of "Rollover contributions" for t...
by MarkNYC
Fri Oct 26, 2018 4:18 pm
Forum: Personal Finance (Not Investing)
Topic: Working in NYC: Live in NY or NJ for tax optimization?
Replies: 25
Views: 1856

Re: Working in NYC: Live in NY or NJ for tax optimization?

The Jersey state income tax is only like 5.5%, which is much much less than NY's. NJ's top individual tax rate is 8.97%. At taxable income below $500K, NY St tax rate is slightly higher than NJ. Above $500K, NJ rate is higher than NYS. For 2018 there's also a 10.75% NJ bracket on income above $5mil...
by MarkNYC
Fri Oct 26, 2018 12:47 pm
Forum: Personal Finance (Not Investing)
Topic: Working in NYC: Live in NY or NJ for tax optimization?
Replies: 25
Views: 1856

Re: Working in NYC: Live in NY or NJ for tax optimization?

jks1985 wrote:
Fri Oct 26, 2018 12:03 pm
The Jersey state income tax is only like 5.5%, which is much much less than NY's.
NJ's top individual tax rate is 8.97%. At taxable income below $500K, NY St tax rate is slightly higher than NJ. Above $500K, NJ rate is higher than NYS.
by MarkNYC
Tue Oct 23, 2018 3:06 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Implications of a (very) Appreciated House
Replies: 19
Views: 2164

Re: Tax Implications of a (very) Appreciated House

So if you sold the house the same year she went into care, at least you would have a lot of medical tax deductions to help offset her capital gains. We don't have enough information (i.e. when her husband died and what the value of the house was at that point), but we are thinking that if it was fa...
by MarkNYC
Mon Oct 22, 2018 6:17 pm
Forum: Personal Finance (Not Investing)
Topic: IRS - Anyone deal with you owe us more tax letter?
Replies: 13
Views: 1870

Re: IRS - Anyone deal with you owe us more tax letter?

I received a letter back in July stating I owed more tax(2016) due to a 1099 for they received from a brokerage house from some RSUs I cashed in. Income was reported via w2 and I had no record of that 1099. Also tried to ding me for a Roth roll over. I responded to letter with supporting documents ...
by MarkNYC
Wed Oct 17, 2018 8:28 am
Forum: Personal Finance (Not Investing)
Topic: What would you do with unexpected tax refund?
Replies: 27
Views: 1630

Re: What would you do with unexpected tax refund?

Once you sort out what to do with the money I would still go back and re-look at the process and the capability of your tax practitioner. In most cases there should be no reason for a surprise refund at this late date. First, the fourth quarter payment isn't due until January 15 and for many (most?...
by MarkNYC
Tue Oct 16, 2018 3:47 pm
Forum: Personal Finance (Not Investing)
Topic: CA property tax > $10K, any options to deduct all?
Replies: 45
Views: 5905

Re: CA property tax > $10K, any options to deduct all?

And remember that if you were in the AMT, we were not deducting real estate taxes anyway so you may not notice a big difference this year. Try running some projections with some of the online tax projection programs to see what you're in for. This is an important point. In high tax states like NY a...
by MarkNYC
Mon Oct 15, 2018 6:54 pm
Forum: Personal Finance (Not Investing)
Topic: CA vs NY: TAXES / BENEFITS
Replies: 11
Views: 759

Re: CA vs NY: TAXES / BENEFITS

In NY, if you are thinking about living in NYC, you should probably register there. The city will force an unincorporated business tax on you if you don't. I'm not sure why you think that would help. An LLC is an unincorporated business, and if operating in NYC is subject to the 4% NY City Unincorp...