Search found 1378 matches

by MarkNYC
Mon Nov 12, 2018 10:44 am
Forum: Personal Finance (Not Investing)
Topic: which way is simpler if NOL
Replies: 8
Views: 559

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: 222

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: 899

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: 1782

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: 1782

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: 2128

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: 1828

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: 1575

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: 5831

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: 741

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...
by MarkNYC
Wed Oct 10, 2018 4:46 pm
Forum: Personal Finance (Not Investing)
Topic: Gifting Appreciated Stocks to Grandparent to pay Child's Private School Tuition
Replies: 127
Views: 8685

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

OP, run your plan by the IRS, let us know what the IRS thinks. Seems pretty easy way to decide the argument, no? Not quite that easy. The IRS telephone customer service agents are well-trained in procedures for filing, and paying, and responding to notices. They are do not have expertise in technic...
by MarkNYC
Tue Oct 09, 2018 11:41 am
Forum: Personal Finance (Not Investing)
Topic: 2018 Tax Planning - one spouse with one state income, other spouse with multi states income
Replies: 7
Views: 546

Re: 2018 Tax Planning - one spouse with one state income, other spouse with multi states income

Most states require that you use the same filing status you used on the federal tax return, unless one spouse is a resident and the other is a nonresident. I believe VA follows that rule, so you may be required to file a joint VA nonresident return. Even though filing jointly, as a VA nonresident on...
by MarkNYC
Fri Oct 05, 2018 8:35 pm
Forum: Investing - Help with Personal Investments
Topic: Question Regarding SEP-IRA Distributions
Replies: 26
Views: 1142

Re: Question Regarding SEP-IRA Distributions

It doesn’t matter that Vanguard says it was for 2017. They don’t know when you’ll take the deduction. In May 2019 Vanguard will send you and the IRS the Form 5498 which will give the total SEP IRA contributions you made during 2018. It doesn’t separate out contributions made in 2018 for 2017 from t...
by MarkNYC
Fri Oct 05, 2018 6:37 pm
Forum: Investing - Help with Personal Investments
Topic: Question Regarding SEP-IRA Distributions
Replies: 26
Views: 1142

Re: Question Regarding SEP-IRA Distributions

If a self-employed individual made a SEP IRA contribution in Jan 2018 for 2017 net self-employment earnings, but a deduction was not taken on their tax return. They can simply file a 2017 amended return in the next 10 days claiming the deduction on Form 1040 Line 28. ... They need to get busy and a...
by MarkNYC
Wed Oct 03, 2018 5:21 pm
Forum: Investing - Help with Personal Investments
Topic: Question Regarding SEP-IRA Distributions
Replies: 26
Views: 1142

Re: Question Regarding SEP-IRA Distributions

I believe all SEP IRAs are pre-tax. Those contributions should have been deducted on your 1040 form. If you did not deduct them, you could amend your returns for the past few years and get some of those taxes back. An individual must claim the SEP IRA deduction by their tax filing date including ex...
by MarkNYC
Wed Oct 03, 2018 12:25 pm
Forum: Investing - Help with Personal Investments
Topic: Federal Income Tax Question – Use Form 1041 or Form 1040 to Report Interest Income?
Replies: 4
Views: 474

Re: Federal Income Tax Question – Use Form 1041 or Form 1040 to Report Interest Income?

It does not have to be all or nothing. It may be advisable to retain that amount of income subject to a lower marginal rate in the trust. This is assuming that the trust terms do not mandate distribution of all income or the beneficiary needs/wants the income. The o/p said he deposits all income ch...
by MarkNYC
Wed Oct 03, 2018 10:37 am
Forum: Investing - Help with Personal Investments
Topic: Federal Income Tax Question – Use Form 1041 or Form 1040 to Report Interest Income?
Replies: 4
Views: 474

Re: Federal Income Tax Question – Use Form 1041 or Form 1040 to Report Interest Income?

As a practical matter, if the 1099-INT issued by Treasury Direct is in the EIN of the trust, I would report the income on the trust; if the 1099 has your SSN, I would report the income directly on your personal return in order to avoid an IRS computer matching notice. In either case the income shoul...
by MarkNYC
Mon Sep 24, 2018 7:11 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Question - NY K1
Replies: 5
Views: 431

Re: Tax Question - NY K1

Thank you. So if the Federal K-1 is let's say $100K, with no income from NJ, line 21 on NJ Tax form will be closer to $100K than $0k. Sorry to sound so basic, I really am not good with forms and need to ensure my accountant is doing it correct. The $100K is on the NYS Non resident tax form as well ...
by MarkNYC
Sun Sep 23, 2018 8:15 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Question - NY K1
Replies: 5
Views: 431

Re: Tax Question - NY K1

I received a NY K1 with all income attributable to NY. A NY non-resident tax return will include that amount. However, do I include that amount in NJ 1040R, line 21? Or is that amount not reported on that line. I am a NJ resident. As a NJ resident, the amounts on the NY K-1 get listed on your NY no...
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: 45
Views: 3298

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: 341

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: 383

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: 383

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: 812

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: 582

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: 582

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: 1854

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: 1854

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: 1854

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: 4765

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: 1854

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: 4765

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: 1034

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: 1034

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: 588

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: 799

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: 2548

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: 286

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: 2548

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: 211

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: 1278

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: 1278

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: 2548

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: 2548

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: 537

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: 2104

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: 2104

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: 428

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: 428

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: 2600

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...