Search found 1325 matches

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: 7
Views: 388

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: 7
Views: 388

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: 1049

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: 1049

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: 1049

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: 4743

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: 975

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: 975

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: 975

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: 1775

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: 1775

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: 1775

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: 1290

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: 1775

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: 1775

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: 1775

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
Tue Jul 10, 2018 8:01 pm
Forum: Personal Finance (Not Investing)
Topic: Accounting question about inherited Roth IRA
Replies: 6
Views: 529

Re: Accounting question about inherited Roth IRA

On my tax return, I noticed that my accountant had placed the required minimum distribution from my inherited Roth IRA on a line that said it was a non-qualified distribution. ......................... according to this chart (Fig 2.1) https://www.irs.gov/publications/p590b#en_US_2017_publink100023...
by MarkNYC
Tue Jul 10, 2018 7:39 pm
Forum: Investing - Help with Personal Investments
Topic: Must I submit a revised tax return?
Replies: 23
Views: 1775

Re: Must I submit a revised tax return?

NotWhoYouThink wrote:
Tue Jul 10, 2018 7:29 pm
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.
by MarkNYC
Tue Jul 10, 2018 7:06 pm
Forum: Investing - Help with Personal Investments
Topic: Must I submit a revised tax return?
Replies: 23
Views: 1775

Re: Must I submit a revised tax return?

AerialWombat wrote:
Tue Jul 10, 2018 5:57 pm
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.
by MarkNYC
Tue Jul 03, 2018 12:38 pm
Forum: Personal Finance (Not Investing)
Topic: Will I ever be able to itemize?
Replies: 64
Views: 4355

Re: Will I ever be able to itemize?

Most people who come out behind under the new rules are those who had very high itemized deductions in the past (or would in the future). Particularly those with his high SALT. I would revise this by adding: those who were previously subject to zero or minimal Alternative Minimum Tax. Here's a real...
by MarkNYC
Mon Jul 02, 2018 2:54 pm
Forum: Personal Finance (Not Investing)
Topic: IRS publishes draft 2018 1040 - Huge changes made
Replies: 156
Views: 16768

Re: IRS publishes draft 2018 1040 - Huge changes made

Given this language, I don't see any validity to a claim that dividend income from REITs constitutes "qualified business income" for purposes of the 20% deduction. Strictly speaking, dividend income from REITs is not qualified business income. However, 20% of certain dividend income from REITs is i...
by MarkNYC
Sun Jul 01, 2018 5:29 pm
Forum: Personal Finance (Not Investing)
Topic: Required minimum distributions from IRA
Replies: 18
Views: 1487

Re: Required minimum distributions from IRA

Am I supposed to receive a form from each IRA trustee, advising RMD and asking if I am them to withhold a certain percent for federal taxes? Fidelity will you tell online (no form) what they estimate to be your RMD for the year based on the accounts they have. The required annual RMD statement I me...
by MarkNYC
Sun Jul 01, 2018 5:19 pm
Forum: Personal Finance (Not Investing)
Topic: Required minimum distributions from IRA
Replies: 18
Views: 1487

Re: Required minimum distributions from IRA

Am I supposed to receive a form from each IRA trustee, advising RMD and asking if I am them to withhold a certain percent for federal taxes? Every traditional IRA custodian/trustee must send a notice annually (by Jan 31) to each IRA owner who must receive an RMD, informing the owner of the RMD requ...
by MarkNYC
Fri Jun 29, 2018 7:21 pm
Forum: Personal Finance (Not Investing)
Topic: IRS publishes draft 2018 1040 - Huge changes made
Replies: 156
Views: 16768

Re: IRS publishes draft 2018 1040 - Huge changes made

Bruce, The 20% deduction will apply to "qualified business income". REIT dividends and income from publicly traded partnerships (MLPs) are excluded from the definition of qualified business income. IRC Sec 199A(c)(1) Mark Not sure I read it that way. QBI does indeed exclude qualified dividends (i.e...
by MarkNYC
Fri Jun 29, 2018 3:15 pm
Forum: Personal Finance (Not Investing)
Topic: IRS publishes draft 2018 1040 - Huge changes made
Replies: 156
Views: 16768

Re: IRS publishes draft 2018 1040 - Huge changes made

WSJ article on the new form: [*]Similarly AMT forecast to go from 5M to 200k households [/list] I suspect that the answer is "yes," but if you have AMT Foreign Tax Carryovers and, because of the new tax law, you are no longer subject to the AMT, do you lose the carryovers and no longer need to trac...
by MarkNYC
Fri Jun 29, 2018 11:47 am
Forum: Personal Finance (Not Investing)
Topic: IRS publishes draft 2018 1040 - Huge changes made
Replies: 156
Views: 16768

Re: IRS publishes draft 2018 1040 - Huge changes made

One new adjustment on page 2 of the 1040 is line 9 for “qualified business income deductions (see instructions)” which I assume is for the 20% small business deduction under Section 199A. The following is all I could find on line 9, from the WSJ https://www.wsj.com/articles/the-new-1040-tax-form-it...
by MarkNYC
Wed Jun 27, 2018 3:37 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated taxes question
Replies: 12
Views: 714

Re: Estimated taxes question

I am not sure of any rule that prevents sending a voucher for the same due date more than once at different times before that due date. Maybe someone else can chime in if that somehow causes a problem. It does not cause a problem. If you have already sent in a 2nd quarter estimated payment along wi...
by MarkNYC
Sat May 26, 2018 9:59 am
Forum: Personal Finance (Not Investing)
Topic: Does IRS penalize for overpayment of taxes?
Replies: 19
Views: 2103

Re: Does IRS penalize for overpayment of taxes?

Just this week a coworker and I were talking about estimating taxes and he said you can be assessed fines for both underpaying and overpaying. I was surprised but he was confident that is the case. Your coworker is mistaken. There is no penalty for overpaying estimated income tax or any other type ...
by MarkNYC
Fri May 25, 2018 8:45 am
Forum: Personal Finance (Not Investing)
Topic: Selling ‘Gifted’ property
Replies: 7
Views: 1290

Re: Selling ‘Gifted’ property

If it's within 9 months from the first transfer, the child might be able to disclaim it, thus avoiding two taxable gifts. In this instance, I doubt there are any taxable gifts. For 2017, the gift tax exemption was $5.5M (IIRC) and has increased to $11M (IIRC) for 2018. The term "taxable gift" refer...
by MarkNYC
Wed May 23, 2018 8:18 pm
Forum: Personal Finance (Not Investing)
Topic: Helping a friend injured in a car crash file a few years of back tax returns, missing a weird K-1...
Replies: 6
Views: 600

Re: Helping a friend injured in a car crash file a few years of back tax returns, missing a weird K-1...

Will they run into difficulties if they do not report that missing income? If you think they might run into trouble, what is the best solution? As a part of the Schwab portfolio they owned a teeny-tiny share of something called PowerShares DB Commodity Index, which I have learned is some kind of we...
by MarkNYC
Sun May 20, 2018 6:21 pm
Forum: Investing - Help with Personal Investments
Topic: Tax related questions
Replies: 17
Views: 1511

Re: Tax related questions

Are withdrawals from 401K subject to state tax? If so, how is taxed if I end up living in my home country after age 59.5 (in which case I will not be tied to any state)? Your last state of residency before you leave the USA will consider you a resident and continue taxing your income while you are ...
by MarkNYC
Thu May 10, 2018 6:53 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated tax question
Replies: 21
Views: 1783

Re: Estimated tax question

It's very much a semantic issue: what is the definition of "safe harbor" in this situation? Those who define it as "not having to pay a penalty" will reach conclusions different from those who define it as "any one of the three conditions leading to the 'You are NOT required to pay estimated tax' b...
by MarkNYC
Thu May 10, 2018 3:41 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated tax question
Replies: 21
Views: 1783

Re: Estimated tax question

Since a single first quarter installment is not four equal installments it does not exactly follow the description of the safe harbor. Note that form 1040-es specifically says: Payment Due Dates You can pay all of your estimated tax by April 17, 2018, or in four equal amounts by the dates shown bel...
by MarkNYC
Tue May 08, 2018 2:14 pm
Forum: Investing - Theory, News & General
Topic: Don't leave your non-spouse heirs TIRAs with basis, unless you hate them!
Replies: 92
Views: 9209

Re: Don't leave your non-spouse heirs TIRAs with basis, unless you hate them!

I suspect those who have both their own 8606 as well as an inherited IRA with basis and thus an inherited 8606 usually have more complex tax returns... The complication comes for those using tax software, none of which can handle this situation. It’s not just a matter of having to do an 8606 by han...
by MarkNYC
Sun May 06, 2018 3:55 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Filing [Should 1040X be filed?]
Replies: 7
Views: 973

Re: IRS Filing

My son is in college, so I helped him file his taxes electronically on about 23 March and he was due about a $100 refund. After we filed, I realized we left some income off and he owed about $1000, assuming the $100 refund came through. I expected the $100 refund to show up before 17 April, but it ...
by MarkNYC
Tue Apr 17, 2018 2:41 pm
Forum: Personal Finance (Not Investing)
Topic: Relative Never Took RMDs on Inherited IRA From 2004
Replies: 19
Views: 2728

Re: Relative Never Took RMDs on Inherited IRA From 2004

I have never heard of an instance where the IRS assessed the 50% penalty tax either proactively or as a result of a denial of a waiver request on Form 5329. If it ever happens it is rare. I had an opportunity recently to speak briefly with a former IRS Commissioner and asked him about this, that is,...
by MarkNYC
Sun Apr 15, 2018 6:05 pm
Forum: Personal Finance (Not Investing)
Topic: HELP - IRS says I owe close to $12,000 for 2016 taxes
Replies: 26
Views: 4592

Re: HELP - IRS says I owe close to $12,000 for 2016 taxes

The IRS realized the mistake and sent her a bill this week. Gross proceeds not reported: $37,000 Taxes owed: $9,100 Tax understatement penalty: $1,800 Interest: $440 I assume the IRS used a cost basis of 0 and assumed everything was a short-term gain. She's in the 25% tax bracket and that seems to ...
by MarkNYC
Sat Mar 31, 2018 8:26 am
Forum: Investing - Help with Personal Investments
Topic: Residential Energy Credits-Non owned property
Replies: 14
Views: 836

Re: Residential Energy Credits-Non owned property

barberakb wrote:
Fri Mar 30, 2018 2:26 pm
The way I read it would be no.

Both the first and last sentence state "your home"

IMO it isn't your home unless you own it.
So would you consider a person who rents to be a homeless person? :wink:
by MarkNYC
Thu Mar 29, 2018 1:47 pm
Forum: Personal Finance (Not Investing)
Topic: SS Taxation -Please Clarify
Replies: 12
Views: 1377

Re: SS Taxation -Please Clarify

After reading the Bogleheads wiki on the subject [Taxation of Social Security benefits] ... $90,000 AGI [?] exceeds couple's upper base of $44,000 so 85% of SS is taxable, 85% of $20,000 = $17,000 Your $90,000 is correct. (However it is not called AGI (Adjusted Gross Income) -- that refers to somet...
by MarkNYC
Thu Mar 29, 2018 11:43 am
Forum: Personal Finance (Not Investing)
Topic: No income but sold a house... (taxes)
Replies: 29
Views: 2794

Re: No income but sold a house... (taxes)

Since the home was inherited, it's probably eligible for LTCL treatment - so even though you don't get a refund, that Long Term Capital Loss will carry forward. In the original post, the OP says "sold my home in Colorado and moved to Nevada." This suggests the home was used as a personal residence....
by MarkNYC
Tue Mar 27, 2018 7:18 pm
Forum: Personal Finance (Not Investing)
Topic: Gifting Appreciated Stocks to Grandparent to pay Child's Private School Tuition
Replies: 121
Views: 7475

Re: Gifting Appreciated Stocks to Grandparent to pay Child's Private School Tuition

The grandparent's cost basis will be the fair market value at the time of the donation, so if the grandparent immediately sells it, their capital gains will be zero. That's not correct. The basis for the recipient of the gift will be the same as the basis for the person who made the gift. Not accor...
by MarkNYC
Tue Mar 27, 2018 7:10 pm
Forum: Personal Finance (Not Investing)
Topic: Gifting Appreciated Stocks to Grandparent to pay Child's Private School Tuition
Replies: 121
Views: 7475

Re: Gifting Appreciated Stocks to Grandparent to pay Child's Private School Tuition

willthrill81 wrote:
Tue Mar 27, 2018 4:48 pm
The grandparent's cost basis will be the fair market value at the time of the donation, so if the grandparent immediately sells it, their capital gains will be zero.
That's not correct. The basis for the recipient of the gift will be the same as the basis for the person who made the gift.
by MarkNYC
Sat Mar 17, 2018 11:08 am
Forum: Personal Finance (Not Investing)
Topic: I owe $50k in 2017 taxes. Where can I find a good accountant/ bookkeeper? Or DIY?
Replies: 26
Views: 3650

Re: I owe $50k in 2017 taxes. Where can I find a good accountant/ bookkeeper? Or DIY?

Note that filing for an extension does not relieve you of the obligation to pay the tax by April 15. If you pay 90% of the tax by April 15 (including the payment with the extension, plus any payments already made by withholding and estimated tax), you can file for an extension, and owe only interes...
by MarkNYC
Thu Mar 15, 2018 6:54 pm
Forum: Investing - Help with Personal Investments
Topic: Help with the new tax laws and deductions for a w2 salesman
Replies: 8
Views: 589

Re: Help with the new tax laws and deductions for a w2 salesman

As an employee who works as a travelling salesman, you should check your W-2 to see if box 13 is checked. If it is, you qualify as a "statutory employee", which means you can report on Schedule C both your wage income and your unreimbursed business expenses (without paying self-employment tax).
by MarkNYC
Thu Mar 15, 2018 4:54 pm
Forum: Personal Finance (Not Investing)
Topic: Not Claiming Dependant to Get Saver’s Credit
Replies: 13
Views: 1286

Re: Not Claiming Dependant to Get Saver’s Credit

The important part about dependency is that you cannot decide who is a dependent and who is not. The support tests are clear about dependency, so if you legally can be claimed as a dependent of another individual, then you cannot claim yourself (which is to say take your exemption). Just because so...
by MarkNYC
Wed Mar 14, 2018 1:42 pm
Forum: Personal Finance (Not Investing)
Topic: Trad IRA Conversion to Roth: Should I bother? [What is "earned income"?]
Replies: 23
Views: 1376

Re: What constitutes earned income for trad/Roth IRA contributions?

* Report $3000 income on your Schedule C. * Do not take any business deductions. * You will have to compute Self-Employment tax on Schedule SE. * Compute Form 8880. You will garner a Savers Credit of $1000 for your (>$2000) IRA contribution, whether it is Traditional IRA or Roth IRA. * In your othe...
by MarkNYC
Tue Mar 13, 2018 7:29 pm
Forum: Personal Finance (Not Investing)
Topic: MLP Taxation Confusion [Master Limited Partnership]
Replies: 27
Views: 1826

Re: MLP Taxation Confusion [Master Limited Partnership]

Your original basis is increased by any income items on the K-1s, and is decreased by any loss or deduction items on the K-1s as well as any distributions received. The losses on the K-1s are generally not deductible until the year of sale, so be sure to indicate on your tax program input that 2017 ...
by MarkNYC
Tue Mar 13, 2018 2:06 pm
Forum: Personal Finance (Not Investing)
Topic: Inhertiance beneficiaries and tax deductions
Replies: 5
Views: 706

Re: Inhertiance beneficiaries and tax deductions

My friend, Roger, and his sister are the only beneficiaries. They have donated some stuff to goodwill such as clothing and medical equipment. For this the "estate" has some donation receipts which all together total about $2,000. When filing their taxes, it's my understanding that both Roger and hi...
by MarkNYC
Mon Mar 12, 2018 6:45 pm
Forum: Personal Finance (Not Investing)
Topic: When does a trust file?
Replies: 10
Views: 893

Re: When does a trust file?

Mark, what’s your reaction to my idea of filing a return in order to generate a K-1? Gill Gill, I think your suggestion makes sense, because it would be very helpful to the beneficiary. Perhaps the "under $600" part of the filing requirements is analogous to the 1099-MISC filing requirement, where ...
by MarkNYC
Mon Mar 12, 2018 5:42 pm
Forum: Personal Finance (Not Investing)
Topic: When does a trust file?
Replies: 10
Views: 893

Re: When does a trust file?

Without looking up the reference, I believe “Taxable Income” here refers to to a positive non zero number on the 1041 line 22. This is not the same as just having a couple of hundred dollars of interest. Yes, you might be correct; I assumed the OP didn't have deductions from lines 11 - 21, as he wa...