Search found 1197 matches

by MarkNYC
Sun Dec 10, 2017 10:41 pm
Forum: Personal Finance (Not Investing)
Topic: Prepayment of SALT Taxes? [State and Local]
Replies: 175
Views: 10255

Re: Prepayment of SALT Taxes? [State and Local]

I think the worst case might be taking the deduction in 2017, having it disallowed and be unable to take a (still permitted) deduction in 2018 because the tax was paid in 2017. I’m pretty sure IRS cannot disallow it in both years. If the 2018 tax is paid in 2017, it absolutely cannot be deducted in...
by MarkNYC
Sun Dec 10, 2017 9:16 pm
Forum: Personal Finance (Not Investing)
Topic: Prepayment of SALT Taxes? [State and Local]
Replies: 175
Views: 10255

Re: Prepayment of SALT Taxes? [State and Local]

I think the worst case might be taking the deduction in 2017, having it disallowed and be unable to take a (still permitted) deduction in 2018 because the tax was paid in 2017. I’m pretty sure IRS cannot disallow it in both years. If the 2018 tax is paid in 2017, it absolutely cannot be deducted in...
by MarkNYC
Wed Dec 06, 2017 4:21 pm
Forum: Personal Finance (Not Investing)
Topic: Worth it to Amend incorrect CPA prepared tax returns?
Replies: 33
Views: 1814

Re: Worth it to Amend incorrect CPA prepared tax returns?

Amending a return is fairly simple. You can learn and do it yourself. On Form 1040X, be sure to clearly explain the reason for amending the return. Include a table that have 3 columns: "as original filed", "as filed", and "difference" to show your calculation. You will need to recalculate your AMTI...
by MarkNYC
Sun Dec 03, 2017 10:34 pm
Forum: Investing - Help with Personal Investments
Topic: Is this worth amending my returns? Contribution tax year details.
Replies: 6
Views: 625

Re: Is this worth amending my returns? Contribution tax year details.

I was reviewing my tax returns to clarify if I could make a Vanguard traditional IRA contribution for 2017 or not. I made a traditional IRA contribution in March of 2017 for tax year 2016 before I filed my taxes. However, reviewing my returns, I noticed line 4 of form 8606 is erroneously left blank...
by MarkNYC
Thu Nov 30, 2017 4:32 pm
Forum: Personal Finance (Not Investing)
Topic: Limiting Income to <$250K for tax purposes
Replies: 20
Views: 2860

Re: Limiting Income to <$250K for tax purposes

I'm confused. What is the point? I infer from the post that your time may be better spent going out there and making more money and not worrying about marginal tax changes. If you top off all the marginal tax rates, you know you're paying the top rate so none of the tweaking is going to do any good...
by MarkNYC
Thu Nov 30, 2017 2:42 pm
Forum: Personal Finance (Not Investing)
Topic: Limiting Income to <$250K for tax purposes
Replies: 20
Views: 2860

Re: Limiting Income to <$250K for tax purposes

I'm confused. What is the point? I infer from the post that your time may be better spent going out there and making more money and not worrying about marginal tax changes. If you top off all the marginal tax rates, you know you're paying the top rate so none of the tweaking is going to do any good...
by MarkNYC
Tue Nov 28, 2017 9:15 am
Forum: Personal Finance (Not Investing)
Topic: Amend 2015 taxes based on a new K-1 two years later?
Replies: 35
Views: 1779

Re: Amend 2015 taxes based on a new K-1 two years later?

There will be no 20% penalty. The 20% negligence penalty only applies when the additional tax is the greater of $5,000 or 10% of the corrected total tax. So never a 20% penalty when the additional tax is less than $5,000. [/quote] I think you are getting negligence and substantial understatement co...
by MarkNYC
Mon Nov 27, 2017 6:36 pm
Forum: Personal Finance (Not Investing)
Topic: Amend 2015 taxes based on a new K-1 two years later?
Replies: 35
Views: 1779

Re: Amend 2015 taxes based on a new K-1 two years later?

2 options here: 1) File amended return and pay the tax now. 2) Wait and pay the tax PLUS a nice 20% penalty later. Your choice. There will be no 20% penalty. The 20% negligence penalty only applies when the additional tax is the greater of $5,000 or 10% of the corrected total tax. So never a 20% pe...
by MarkNYC
Mon Nov 27, 2017 11:47 am
Forum: Personal Finance (Not Investing)
Topic: Amend 2015 taxes based on a new K-1 two years later?
Replies: 35
Views: 1779

Re: Amend 2015 taxes based on a new K-1 two years later?

You indicated she inherited about $25,000 in 2015, of which about $7,500 is being reported as taxable on the K-1. You also indicated "numerous trusts and IRAs were distributed." The IRAs that were distributed would be taxable, as ordinary income NOT capital gain, and the $6,794 in box 5 of the K-1 s...
by MarkNYC
Sun Nov 26, 2017 5:13 pm
Forum: Personal Finance (Not Investing)
Topic: IRS form 1065 help: rental property in a partnership
Replies: 25
Views: 1091

Re: IRS form 1065 help: rental property in a partnership

If the net income reported on the partners' K-1s was accurate, then there is no compelling reason to amend. Just have the 1065 prepared correctly going forward.
by MarkNYC
Sat Nov 25, 2017 10:16 am
Forum: Personal Finance (Not Investing)
Topic: IRS form 1065 help: rental property in a partnership
Replies: 25
Views: 1091

Re: IRS form 1065 help: rental property in a partnership

Form 8825 would be the proper form to use to report a partnership's income and expenses from rental real estate.
by MarkNYC
Mon Nov 20, 2017 9:10 pm
Forum: Personal Finance (Not Investing)
Topic: Return of IRA contribution performed early in year, amend 1040 that year or the prior year?
Replies: 15
Views: 866

Re: Return of IRA contribution performed early in year, amend 1040 that year or the prior year?

I disagree with celia and agree with Alan that Form 8606 does not apply to this transaction. Form 8606 instructions state that if an IRA contribution is "returned to you" by the due date of the tax return, "the returned contributions are treated as if they were never contributed. Do not report the c...
by MarkNYC
Mon Nov 20, 2017 7:11 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401(k) contributions on rental income?
Replies: 8
Views: 691

Re: Solo 401(k) contributions on rental income?

A person who qualifies as a real estate professional can treat income from rental real estate as nonpassive income, but that income is still not treated as "earned income", so the income is not subject to self-employment tax and will not support an IRA contribution or 401K contribution. "Nonpassive ...
by MarkNYC
Mon Nov 20, 2017 2:07 pm
Forum: Personal Finance (Not Investing)
Topic: Help w/ NY state tax return and attachments
Replies: 3
Views: 355

Re: Help w/ NY state tax return and attachments

livesoft, Not sure why this happens. It could be that paper-filing exposes the tax return to superficial human review, and having the NY column adjustments fully offset the NY income column amount doesn't look right to the front line person, so it gets flagged. My only suggestion is to try efiling a...
by MarkNYC
Fri Nov 17, 2017 1:12 pm
Forum: Personal Finance (Not Investing)
Topic: Forgot to file form 5500EZ for 2016 year
Replies: 20
Views: 1173

Re: Forgot to file form 5500EZ for 2016 year

Have you looked into the first time penalty waiver for late filing? It's a one-time deal and should be automatic. No I haven't. All I have seen is that I can ask for a waiver but that if I'm denied I have to pay the full penalty. Is what you are referring to a broad policy, or something specific to...
by MarkNYC
Thu Nov 16, 2017 7:30 pm
Forum: Personal Finance (Not Investing)
Topic: question for cpa? state income tax when living / moving back and forth in CA and WA?
Replies: 17
Views: 1262

Re: question for cpa? state income tax when living / moving back and forth in CA and WA?

Generally, most states have either a "domicile"-type rule or a "domicile or presence"-type rule to determine residency. The domicile-type rule means that you're only a resident of the state if that's where your true home is, where you would want to return to after temporary locations. The "domicile...
by MarkNYC
Wed Nov 15, 2017 3:33 pm
Forum: Personal Finance (Not Investing)
Topic: Form 5498 or 1099R (IRA to Roth Conversion)
Replies: 40
Views: 1886

Re: Form 5498 or 1099R (IRA to Roth Conversion)

Just curious - the IRS antiquated computer systems do whatever matching is done and it takes several months. If a mismatch is identified, is the CP 2000 automated or does an IRS staffer review the mismatches before the CP 2000 is mailed? Or perhaps some of each? Alan, According to the Internal Reve...
by MarkNYC
Tue Nov 14, 2017 5:40 pm
Forum: Personal Finance (Not Investing)
Topic: Form 5498 or 1099R (IRA to Roth Conversion)
Replies: 40
Views: 1886

Re: Form 5498 or 1099R (IRA to Roth Conversion)

Code 2 on the 1099-R will almost always be an indication of a Roth conversion. Other than conversions prior to 59 1/2, Code 2 is only used (1) to show a distribution forced by an IRS levy, or (2) to show a distribution that is part of a SEPP (series of substantially equal periodic payments). Those ...
by MarkNYC
Tue Nov 14, 2017 4:01 pm
Forum: Personal Finance (Not Investing)
Topic: Form 5498 or 1099R (IRA to Roth Conversion)
Replies: 40
Views: 1886

Re: Form 5498 or 1099R (IRA to Roth Conversion)

Yes. When you do a Roth conversion, you MUST complete lines 16-18 of Form 8606 for the form to be complete and accurate. (unless it was fully recharacterized) Line 18 shows the "taxable amount" of the conversion. If left blank, the IRS will assume the conversion is fully taxable. Thanks. I don't se...
by MarkNYC
Tue Nov 14, 2017 9:05 am
Forum: Personal Finance (Not Investing)
Topic: Form 5498 or 1099R (IRA to Roth Conversion)
Replies: 40
Views: 1886

Re: Form 5498 or 1099R (IRA to Roth Conversion)

Yes. When you do a Roth conversion, you MUST complete lines 16-18 of Form 8606 for the form to be complete and accurate. (unless it was fully recharacterized) Line 18 shows the "taxable amount" of the conversion. If left blank, the IRS will assume the conversion is fully taxable. Thanks. I don't se...
by MarkNYC
Mon Nov 13, 2017 6:57 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Procedure Q - Proactively Send Payment For Taxes Owed Without IRS Requesting It?
Replies: 2
Views: 411

Re: Tax Procedure Q - Proactively Send Payment For Taxes Owed Without IRS Requesting It?

I suggest you follow the instructions on the IRS notice by sending them the completed Form 6251 without payment. Sending in an advance payment may create some confusion and may result in additional unnecessary correspondence. You should not be concerned with the additional 4-6 weeks it may take for ...
by MarkNYC
Mon Nov 13, 2017 3:15 pm
Forum: Personal Finance (Not Investing)
Topic: Form 5498 or 1099R (IRA to Roth Conversion)
Replies: 40
Views: 1886

Re: Form 5498 or 1099R (IRA to Roth Conversion)

I don't believe the information on Form 5498 is included in the IRS tax document matching program that generates the CP2000 notice. If it was included, then the IRS could easily detect RMDs that are omitted, and excess Roth contributions due to AGI being too high. I have never seen the IRS catch ei...
by MarkNYC
Mon Nov 13, 2017 2:56 pm
Forum: Personal Finance (Not Investing)
Topic: Form 5498 or 1099R (IRA to Roth Conversion)
Replies: 40
Views: 1886

Re: Form 5498 or 1099R (IRA to Roth Conversion)

I don't believe the information on Form 5498 is included in the IRS tax document matching program that generates the CP2000 notice. If it was included, then the IRS could easily detect RMDs that are omitted, and excess Roth contributions due to AGI being too high. I have never seen the IRS catch eit...
by MarkNYC
Fri Nov 03, 2017 9:11 pm
Forum: Personal Finance (Not Investing)
Topic: Limit Owner Use of Rental Home to Two Weeks?
Replies: 18
Views: 2528

Re: Limit Owner Use of Rental Home to Two Weeks?

If the owner uses the home for personal use for more than 14 days, then all expenses are prorated and any unrented days count as owner personal days. I believe this is stated incorrectly. Code Sec 280A provides the rules relating to personal use of a rental property, which indicates: 1. If the owne...
by MarkNYC
Fri Nov 03, 2017 4:13 pm
Forum: Personal Finance (Not Investing)
Topic: Limit Owner Use of Rental Home to Two Weeks?
Replies: 18
Views: 2528

Re: Limit Owner Use of Rental Home to Two Weeks?

If the owner uses the home for personal use for more than 14 days, then all expenses are prorated and any unrented days count as owner personal days. I believe this is stated incorrectly. Code Sec 280A provides the rules relating to personal use of a rental property, which indicates: 1. If the owne...
by MarkNYC
Fri Oct 27, 2017 8:14 pm
Forum: Investing - Help with Personal Investments
Topic: RMD distribution timing
Replies: 32
Views: 2553

Re: RMD distribution timing

Why do some places/sites call them "RMDs" (which I use) while others call them "MRDs"? Just adds to confusion IMO. I could be wrong but I think MRD is a term that Fidelity uses and since they are a large broker a lot of folks pick up their use of the term. OTOH most of the rest of the world includi...
by MarkNYC
Fri Oct 27, 2017 12:04 pm
Forum: Personal Finance (Not Investing)
Topic: RMD from IRA in year of death
Replies: 18
Views: 1453

Re: RMD from IRA in year of death

Thank you to everybody who replied! The beneficiaries must take the RMD in the year of death. I understand this in general. In my experience in the past, the RMD has been taken by one or more beneficiaries from an inherited IRA. My question is whether a distribution from a regular, non-inherited tr...
by MarkNYC
Fri Oct 13, 2017 7:58 pm
Forum: Investing - Help with Personal Investments
Topic: pay taxes from long term gains on a taxable account
Replies: 18
Views: 1451

Re: pay taxes from long term gains on a taxable account

1040-ES is very easy to use. It can be done online , only a couple pages with minimal info. The other option is to increase withholding on your W4. Don't forget state taxes if that's an issue for you too. ok! wow! I walked through the steps.. and does look easy! thanks! since I only made this money...
by MarkNYC
Fri Oct 13, 2017 4:14 pm
Forum: Personal Finance (Not Investing)
Topic: Does IRS have equivalent of credit freeze?
Replies: 20
Views: 1584

Re: Does IRS have equivalent of credit freeze?

We are in the same boat. This is an interesting idea. When you say incomplete are you suggesting you file a return based on the information you have as of January 26? And then once all W2s,1099s, other information are in your hand you amend it? I haven't thought about what I might put on an early r...
by MarkNYC
Wed Oct 11, 2017 7:38 pm
Forum: Personal Finance (Not Investing)
Topic: Tax issue: Made a mistake on Inherited IRA RMDs for five years
Replies: 38
Views: 3029

Re: Tax issue: Made a mistake on Inherited IRA RMDs for five years

The IRA custodians are supposed to calculate the official RMD each year and tell the account holder what it is each January. Did your wife ever get a notice for any of the years? It could even have been part of the year-end statement. Then you would have seen that you were planning to withdraw a di...
by MarkNYC
Wed Oct 11, 2017 7:10 pm
Forum: Personal Finance (Not Investing)
Topic: Tax issue: Made a mistake on Inherited IRA RMDs for five years
Replies: 38
Views: 3029

Re: Tax issue: Made a mistake on Inherited IRA RMDs for five years

The IRA custodians are supposed to calculate the official RMD each year and tell the account holder what it is each January . Did your wife ever get a notice for any of the years? That was my question. I know VG does this for you. For IRA owners subject to RMDs, the custodian must send the account ...
by MarkNYC
Thu Sep 28, 2017 4:43 pm
Forum: Personal Finance (Not Investing)
Topic: Accidentally Underpaid Income Taxes – Please Advise
Replies: 8
Views: 853

Re: Accidentally Underpaid Income Taxes – Please Advise

If you file and pay the $6K federal tax on Oct 15th, you will owe interest from April 15th at 4% annually, or about $120. If the additional $6K is less than 10% of your total federal tax, there will be no late-payment penalty, only interest. If more than 10% of total tax, you will owe the late-payme...
by MarkNYC
Tue Sep 26, 2017 8:32 pm
Forum: Personal Finance (Not Investing)
Topic: Taxes - parents receiving 1099-Misc for minor son’s earnings
Replies: 16
Views: 1265

Re: Taxes - parents receiving 1099-Misc for minor son’s earnings

This is clearly nominee income. The most practical way to report is to file a schedule C listing the 1099-MISC income, then list the same amount as "other expenses" with the description "nominee" and list the SSN of the correct recipient of the income, resulting in no gain or loss on the Schedule C....
by MarkNYC
Fri Sep 15, 2017 4:10 pm
Forum: Personal Finance (Not Investing)
Topic: Selling Mom's condo and capital gains tax after a multi-year absence
Replies: 14
Views: 1391

Re: Selling Mom's condo and capital gains tax after a multi-year absence

I don't think your understanding is correct. The 2-year residency requirement never drops to 1 year. However, if, during the 5-year period prior to sale the taxpayer's physical or mental incapacity requires that he/she live in a healthcare facility, then the period lived in the healthcare facility ...
by MarkNYC
Fri Sep 15, 2017 3:20 pm
Forum: Personal Finance (Not Investing)
Topic: Selling Mom's condo and capital gains tax after a multi-year absence
Replies: 14
Views: 1391

Re: Selling Mom's condo and capital gains tax after a multi-year absence

I don't think your understanding is correct. The 2-year residency requirement never drops to 1 year. However, if, during the 5-year period prior to sale the taxpayer's physical or mental incapacity requires that he/she live in a healthcare facility, then the period lived in the healthcare facility w...
by MarkNYC
Thu Sep 14, 2017 12:06 pm
Forum: Personal Finance (Not Investing)
Topic: 3Q2017 Estimated taxes are due 15 Sep 2017
Replies: 14
Views: 880

Re: 3Q2017 Estimated taxes are due 15 Sep 2017

I've never paid estimated taxes, even when TurboTax tells me to based on my prior year tax return filing. And I've never been assessed any penalties as a result. TurboTax and other tax programs will generate estimated taxes for the following year based on various default options that are set. The r...
by MarkNYC
Thu Sep 14, 2017 11:56 am
Forum: Personal Finance (Not Investing)
Topic: K-1's and taxes
Replies: 10
Views: 690

Re: K-1's and taxes

I have an MLP with a K1. Pretty simple to log in TaxAct, but you must wait forever to file. Going to dump it this year and take a loss just to avoid the hassle. The major tax-reporting hassle comes in the year of sale. The brokerage 1099 will report the gain based on the original cost, but this wil...
by MarkNYC
Mon Sep 11, 2017 1:53 pm
Forum: Personal Finance (Not Investing)
Topic: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?
Replies: 31
Views: 3920

Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Aside from the standard I'D protection, arrange withholding/estimated taxes so you get a minimal refund. You could file early before you get all of your documents and then file an amended return, but I don't know if it would be worth the hassle. From what I understand the fraud is not sniping your ...
by MarkNYC
Fri Sep 08, 2017 8:33 pm
Forum: Personal Finance (Not Investing)
Topic: Paying Taxes Quarterly
Replies: 21
Views: 2236

Re: Paying Taxes Quarterly

To avoid the penalty, it is only necessary to pay 90% of the actual tax, not 100% - assuming you are not paying amounts based on your prior year tax. So meeting the 90% quarterly on an annualized average? Let's say for whatever reason when December comes I realize I wont need 10K for the final quar...
by MarkNYC
Fri Sep 08, 2017 8:16 pm
Forum: Personal Finance (Not Investing)
Topic: Paying Taxes Quarterly
Replies: 21
Views: 2236

Re: Paying Taxes Quarterly

No, that method won't work. It should be done this way: If your income in the first quarter is $10K, you would annualize that out to $40K for the year. Subtracting the $10,400 for exemption and standard deduction would give you taxable income of $29,600. If tax on that amount is $4,000, you would o...
by MarkNYC
Fri Sep 08, 2017 8:01 pm
Forum: Personal Finance (Not Investing)
Topic: Paying Taxes Quarterly
Replies: 21
Views: 2236

Re: Paying Taxes Quarterly

No, that method won't work. It should be done this way: If your income in the first quarter is $10K, you would annualize that out to $40K for the year. Subtracting the $10,400 for exemption and standard deduction would give you taxable income of $29,600. If tax on that amount is $4,000, you would ow...
by MarkNYC
Sun Aug 27, 2017 9:38 pm
Forum: Personal Finance (Not Investing)
Topic: IRS CP2000 Tax Bill Letter - Please Help
Replies: 32
Views: 2267

Re: IRS CP2000 Tax Bill Letter - Please Help

I opened the mailbox the other morning to find a letter from the IRS. It's a CP2000 stating I owe $5,000+change(including penalty+interest) from 2015. What type of penalty was listed, and how much is it in relation to the additional tax? In the vast majority of cases, a CP2000 letter that results i...
by MarkNYC
Fri Aug 25, 2017 12:59 pm
Forum: Personal Consumer Issues
Topic: Tax Implications of Selling Personal Residence
Replies: 11
Views: 919

Re: Tax Implications of Selling Personal Residence

You do need to report it, or you'll get a letter from the IRS Automated Underreporting system, like I did :(. I did not receive a 1099 and I knew I was well under the $500K limit for a married couple, so didn't report it. Got the letter... In your case, a 1099-S would have been issued for the sale....
by MarkNYC
Fri Aug 25, 2017 12:32 pm
Forum: Personal Consumer Issues
Topic: Tax Implications of Selling Personal Residence
Replies: 11
Views: 919

Re: Tax Implications of Selling Personal Residence

Note that if you deferred a gain when you sold your house a "generation" ago, that deferred gain reduces the basis of the house you recently sold. Sorry, that's incorrect and was repealed many years ago. Gill Gill, I believe pshonore is correct. In 1997 the law was repealed that allowed a gain on s...
by MarkNYC
Thu Aug 17, 2017 4:44 pm
Forum: Investing - Help with Personal Investments
Topic: Tax question about selling my house
Replies: 17
Views: 1595

Re: Tax question about selling my house

I didn't deduct depreciation while I rented it out so I am hoping it won't be affected. Sorry, you will pay "recapture" tax. Recapture is calculated on depreciation that was "allowed or allowable," according to Internal Revenue Code section 1250(b)(3). This means it doesn't matter if you took the d...
by MarkNYC
Wed Aug 16, 2017 9:47 am
Forum: Personal Finance (Not Investing)
Topic: Accountant liable for penalties?
Replies: 33
Views: 3622

Re: Accountant liable for penalties?

Update: My sister talked to the accountant, and he advised sending in the payment to stop the interest clock from running, and he is going to write a letter to the state explaining the situation and asking for a refund for the penalties. Sending in the payment now to stop the interest, and then req...
by MarkNYC
Tue Aug 15, 2017 2:46 pm
Forum: Personal Finance (Not Investing)
Topic: Accountant liable for penalties?
Replies: 33
Views: 3622

Re: Accountant liable for penalties?

How can you hold the accountant liable? He already told you last February that he wouldn't have time to look at it for several months. Now that he's looked at it and run the numbers, there is more money due. We were fine with him filing the extension, where the problem is is that he did not tell us...
by MarkNYC
Tue Aug 15, 2017 12:35 pm
Forum: Personal Finance (Not Investing)
Topic: Accountant liable for penalties?
Replies: 33
Views: 3622

Re: Accountant liable for penalties?

Regarding the IRS, if an extension was properly prepared and filed, there should only be the 1/2 % per month late-payment penalty if less than 90% of the tax was paid, and interest. Interest cannot be abated. For the penalty, you can call or write the IRS requesting penalty abatement due to "reasona...
by MarkNYC
Sun Aug 13, 2017 8:01 pm
Forum: Personal Finance (Not Investing)
Topic: Tax benefits when jointly owning home and how to take title.
Replies: 2
Views: 419

Re: Tax benefits when jointly owning home and how to take title.

If all 3 of you are listed as co-owners, then each person is entitled to take a deduction for real estate tax and mortgage interest to the extent that each person actually made the payments. The percentage of ownership doesn't matter. You can deduct mortgage interest on a principal residence and one...