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ThirdPartyView posted:Did they not send a Form W-9 with their business information? The type of entity is listed on there. They have never sent a W-9 as far as I am aware. She gave them her tax id number when she started working there. All I have right now from them is the 1099 they sent from the past two years. Would it be on there? I would look but the forms are at home and I'm at work right now. I will ask my wife to talk to someone there to determine this information. Come to think of it, I believe the clinic is organized as a "professional association," since they have "PA" listed after their name but I have no idea where that falls along the spectrum of partnership vs. corporation as far as the IRS is concerned, and for all I know that may be completely unrelated to how they are treated as an entity by the IRS.
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Apr 30, 2014 00:08
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AbbiTheDog posted:She should be doing it anyways. The fees they are taking are an expense off her gross and should be treated accordingly. Every expense does not need substantiated with an associated 1099. flowinprose posted:If they are organized as a corporation (I'm honestly not sure they are, they may be a partnership), then would it be WRONG to send them a 1099, or just unnecessary? I think I would feel better about sending them a 1099 even if it isn't necessary, but I don't want to file something that would cause problems. It'd be unnecessary, and it'd likely be ignored, but it wouldn't cause problems. If filing it makes you more comfortable than by all means go for it. Admiral101 fucked around with this message at 01:33 on Apr 30, 2014 |
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Apr 30, 2014 01:31
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Admiral101 posted:Every expense does not need substantiated with an associated 1099. True, but if a nonincorporated entity was taking funds as payment for billing services that would be a service and require a 1099-MISC.
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Apr 30, 2014 16:46
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I have a question about the 401k to roth 401k conversion. Since I'm going to be in business school next year I'm thinking of converting my 401k to a roth and paying the taxes since I'll only be making my MBA internship salary (~$10k which should be in roughly the 15% tax bracket). my question is - will the actual conversion $ amount be treated as income to put me in a higher tax bracket? Say for example I have $100k in my 401k. Does that mean in my conversion year my taxable income will be $10k (only salary) or $110k? (earnings + conversion amount). Basically will the amount I'm converting cause me to go to a higher tax income bracket? Thanks!
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Apr 30, 2014 17:06
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flowinprose posted:
To be clear, normally they just send her a 1099 with the income they pay her less the fees they deduct? And this year she has to pay some fees out of pocket? If that's the case then she can deduct those extra out of pocket fees as an expense.
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May 1, 2014 17:19
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lolercoasterrr posted:I have a question about the 401k to roth 401k conversion. Since I'm going to be in business school next year I'm thinking of converting my 401k to a roth and paying the taxes since I'll only be making my MBA internship salary (~$10k which should be in roughly the 15% tax bracket). Yes, it will be taxed as normal income would be (which it basically is, just deferred), so if you change 100k it will put you in the tax bracket for 110k. I actually don't know the answer to this - could you roll over the whole amount to a traditional IRA, move some of that money in the traditional IRA to a separate traditional IRA account, and then convert that IRA into a Roth? That way you could move ~100k into one account, split that account into a 75k account and a 25k account, then convert the 25k account to a Roth. Total taxable income would then be 35k, just under the 15% bracket. Or if you don't mind paying 25% on some of it, you could convert the 75k account instead.
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May 1, 2014 17:35
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Got it, thanks!
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May 2, 2014 07:36
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Hi, so I'm looking to get a leg up for next year for filing taxes on my own. I recently found a work-from-home job that fits well with me returning to college. The only downside is that I am given a 1099 for tax time, and filing this year, didn't realize it was going to run me $300 to file it with someone in person on top of paying what should have been taken out of my salary. The work I do is essentially representing people in online auctions using my computer. I pay for my own internet and electricity, and the computer is my own personal rig. There have been a few occurrences where I may need to travel somewhere to cover someone at a live auction, or to check something for a client and work pays mileage for that. However, no one I know personally has a clue to the questions I have, and work is really unhelpful with pointing things out since they are in a different state, so I figure I would give it a shot and ask here. When filing taxes next year, what software would you all recommend for filing a 1099 for a first timer? What are acceptable expenses I can file? I've never done this before, so when it came to filing this year, I had nothing but just my 1099 and felt like a fool when it came to the questioning from my tax agent. I heard through the grapevine that I can use my electricity bill or internet bill as expenses, but wanted to find out your opinions on this and/or if I just hand the bill outright, or need to calculate anything. Also, any other expenses that I could claim but not be aware of? Can maintenance on my vehicle like an oil change or something similar be an expense for work?
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May 5, 2014 04:52
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I have a real estate taxation question. I converted my home into a rental property in July of 2011 (Couldn't sell and needed to move for work) and have been renting it out since. When I filed my 2011 taxes I established that the Cost (net of land) at the time of conversion was $127,500 and begun depreciating it over the 27.5 years for $4,636/year (accumulated $11,397 at 2013 YE) and increased the basis by $4,575 over the same time period bringing my new basis to $120,848, I believe. I am considering selling the property this summer (so an additional $2,318 in depreciation if I sell in July, bringing to new basis of $118,530) but am having a difficult time estimating what the taxable impact will be. The property has risen in value over the 3 years as well has the mortgage been slowing decreasing making it near a breakeven point. What is the best way to estimate the taxable impact of the sale as I am beyond the time period where I can claim residency on the sale (either 2 or 3 of the last 5 years, correct?) and will pay capital gains. As the cost excludes the land, how would I go about building that into the price of sale? I would imagine that the calculation goes something like this: Sale of home - (realtor commissions + transfer tax) = Net proceeds (adjust to exclude land??) - Basis = Capital gain * marginal tax rate In numbers that would be: $160,000 (rough estimate, having valuation done this weekend) - $9,600 (realtor fee @ 6%) - $1,376 (.0086% in my state, if I am correct. I calc'd on full sale) _________ $149,024 (net proceeds) - $118,530 (est basis at midyear 2014, could increase as investments will be made to sell) ___________ $30,494 capital gain I don't know my marginal tax rate off hand, but Turbotax said I have an effective tax rate of 5.37% for 2013. But let's assume that my MTR is 25% which would be a $7,623.50 tax bill. Did I do this correctly? Seems steep and could definitely change my decision to sell right now as I would not be at breakeven. Appreciate any insight, thanks! edit: Wait a doggone minute... the IRS publication states "IRS posted:To exclude gain under the rules in this publication, you in most cases must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale. If I sell in the summer of 2014, that means that since I lived it in for all of 2009, 2010, and half of 2011 that I should be exempt from the gain? TraderStav fucked around with this message at 15:19 on May 9, 2014 |
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May 9, 2014 15:15
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TraderStav posted:I have a real estate taxation question. You would just barely qualify if you sold the property by July 2014, yes. However, you would still have to recapture the depreciation you claimed in previous years. So your gain would equal the depreciation you've claimed since converting the residence into a rental property. How much did you allocate to land? Land is only ignored for depreciation purposes, not for purposes of your basis in the property when the property is sold.
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May 9, 2014 19:20
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Admiral101 posted:You would just barely qualify if you sold the property by July 2014, yes. However, you would still have to recapture the depreciation you claimed in previous years. So your gain would equal the depreciation you've claimed since converting the residence into a rental property. I looked through my tax records and I never declared what that amount was. In my notes when talking to the CPA who did my taxes that year (and only did them that year, so I don't have an on-going relationship with him) I put the FMV at $150k, so $22,500 for land. That being said, how do the IRS know what my land value is? When I include the land value and complete the (somewhat confusing, but less now that you mention that I have to pay taxes on the depreciation received) Worksheet 2 from the IRS page I would have around a $9,370 gain and if I'm understanding it correctly the worksheet is ignoring the depreciation on line 6 ($13,715 of depr) because it is less than line 5 ($9,370 gain, calc'd from 150,400 net of commission sale less adjust basis of 141,300 which includes the land). Would this represent the whole of the capital gain + depreciation recapture? Which rate would this $9,370 be at, 15% or 25%? I'm not sure I could sell the house within the narrow 24 month window as my home was converted to the rental on 7/1/11 and my current tenants lease is up on 6/30. Assuming I could sell it within a month (that's pushing it) and sold on 8/1/14 that means that I lived in it for 23 months out of the past 60. Unless I declared that I moved there for the one month that I got it ready for sale then I would hit 24. But I have no idea what other effects that would have in regards to my current residence and primary status, etc. I would still have to repay the depreciation recapture though at either $1,400 (15%) or $2,340 (25%) so I need to factor that into my decision making to sell or hold. However, if I hold my tax burden will increase due to the 24 month/minimum exclusion rolling off. I greatly appreciate your help, it's somewhat confusing and what to make sure I get the numbers correct. I fully intend to have a professional help me with this filing if I sell but at least want to ballpark it for decision making purposes.
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May 9, 2014 20:10
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TraderStav posted:I looked through my tax records and I never declared what that amount was. In my notes when talking to the CPA who did my taxes that year (and only did them that year, so I don't have an on-going relationship with him) I put the FMV at $150k, so $22,500 for land. That being said, how do the IRS know what my land value is? They wouldn't. If this got audited, they'd expect you to provide some kind of settlement sheet documenting what you paid for it, as well as documentation for the methodology you used to achieve the fair market value at time of conversion in 2011. I hope the basis you used at time of conversion in 2011 was less than what you actually paid for in when you originally bought it (you can't "step up" the depreciable basis at time of conversion). edit: Upon re-reading your statements, I'm a bit concerned that you erroneously stepped up your depreciable basis. What did you ACTUALLY purchase this house for back in 2008/2009? Was it a 150,000 or more? TraderStav posted:When I include the land value and complete the (somewhat confusing, but less now that you mention that I have to pay taxes on the depreciation received) Worksheet 2 from the IRS page I would have around a $9,370 gain and if I'm understanding it correctly the worksheet is ignoring the depreciation on line 6 ($13,715 of depr) because it is less than line 5 ($9,370 gain, calc'd from 150,400 net of commission sale less adjust basis of 141,300 which includes the land). Would this represent the whole of the capital gain + depreciation recapture? Which rate would this $9,370 be at, 15% or 25%? Based on the facts you provided, the 9,370 gain sounds roughly accurate. The rate that this gain would be taxed at would depend on your taxable income for 2014. In your circumstances, it could be either 20% or 25% rate. TraderStav posted:I'm not sure I could sell the house within the narrow 24 month window as my home was converted to the rental on 7/1/11 and my current tenants lease is up on 6/30. Assuming I could sell it within a month (that's pushing it) and sold on 8/1/14 that means that I lived in it for 23 months out of the past 60. Unless I declared that I moved there for the one month that I got it ready for sale then I would hit 24. But I have no idea what other effects that would have in regards to my current residence and primary status, etc. I would still have to repay the depreciation recapture though at either $1,400 (15%) or $2,340 (25%) so I need to factor that into my decision making to sell or hold. However, if I hold my tax burden will increase due to the 24 month/minimum exclusion rolling off. Based on the numbers you provided, you're going to be paying tax on the depreciation recapture regardless of whether it's classified as your primary residence or not for 2/5 past tax years. There's no reason to attempt to be clever on your classification of it as a rental property vs personal residence. Keep in mind that if you end up recognizing a loss on this, you would not be able to claim the loss if the house is your personal residence. Again, the 15% rate no longer applies - the tax rate for capital gains is now at 20%. Admiral101 fucked around with this message at 21:15 on May 9, 2014 |
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May 9, 2014 21:08
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Admiral101 posted:They wouldn't. If this got audited, they'd expect you to provide some kind of settlement sheet documenting what you paid for it, as well as documentation for the methodology you used to achieve the fair market value at time of conversion in 2011. I hope the basis you used at time of conversion in 2011 was less than what you actually paid for in when you originally bought it (you can't "step up" the depreciable basis at time of conversion). Most definitely. I paid $184,000 in 2005. I didn't have a strong methodology aside from looking at some comps at the time of conversion. My CPA (potentially wrongly) told me it wouldn't matter as long as it was in the ballpark. Admiral101 posted:Based on the facts you provided, the 9,370 gain sounds roughly accurate. The rate that this gain would be taxed at would depend on your taxable income for 2014. In your circumstances, it could be either 20% or 25% rate. I was on the high end of the 15% MTR with my final taxable income in 13 and anticipate something similar or a little lower in 14 if I sell as the rental income would be missing half a year. Admiral101 posted:Based on the numbers you provided, you're going to be paying tax on the depreciation recapture regardless of whether it's classified as your primary residence or not for 2/5 past tax years. There's no reason to attempt to be clever on your classification of it as a rental property vs personal residence. Keep in mind that if you end up recognizing a loss on this, you would not be able to claim the loss if the house is your personal residence. If I'm understanding this piece correctly, my basis is so close to the sale price (net commissions) that the primary residence/rental property aspect is largely immaterial and the biggest part is the depreciation recapture? I'm still seeing a $9,370 gain ($150,400 net proceeds - $141,030 basis) that I assume would be taxable on top of the $13,715 depreciation that I received in 2011/12/13 and half of 14? The worksheet 2 keeps confusing me as that seems to indicate that the $9,370 would be the all-in taxable gain. One finer point, are the transfer taxes deductible from the proceeds from the sale along with the commissions? If so, reduce the gain by about $1,376 which is my estimated value. Thanks again for your patience and stepping me through this. I think I just about have it. The way the numbers are working out it seems as if I will be taking a small loss by selling, but removing a headache and this may be worth it. The property is located about 60 miles from my home and while the tenants have been good, and the repairs minimal, it's an aging house and probably a good time to get out of it. I like rental property but this home was not purchased with that in mind so it is far from optimal.
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May 9, 2014 21:26
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TraderStav posted:Most definitely. I paid $184,000 in 2005. I didn't have a strong methodology aside from looking at some comps at the time of conversion. My CPA (potentially wrongly) told me it wouldn't matter as long as it was in the ballpark. 9,370 would be the all-in taxable gain, and it would be composed entirely of depreciation recapture (which would be a 20% or 25% rate). Ok, this is the logic: Your house's depreciable basis is 125,000. The depreciation you took on it was 10,000. You sold it for $130,000. As a rental property, you'd have an overall gain of 15,000 - 10,000 of which would be depreciation recapture (also known as unrecaptured 1250 gain). In that scenario, if that house qualified for the primary home exclusion, you'd only recognize a 10,000 gain - which is the portion of the house you previously depreciated. I'm saying that since the gain you're expecting doesn't exceed the amount of depreciation you've already taken on the house, it really doesn't matter if the house is a rental property or qualifies for the primary residence exclusion. You're going to be recognizing the recapture anyway. And to further elaborate - if, in the above scenario, you sold the house for 120,000, you'd only recognize 5,000 of gain. The depreciation recapture cannot exceed the actual gain on the property. And yes, transfer taxes would net against the proceeds in the sale.
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May 9, 2014 21:35
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Admiral101 posted:9,370 would be the all-in taxable gain, and it would be composed entirely of depreciation recapture (which would be a 20% or 25% rate). Thanks! I have enough to satisfy my question. I can safely assume a $1600-2000 impact on the sale ($7,994 gain based on 160k sale, 6% commissions, .0086% sales tax rate). I will now sit with my realtor to figure out valuation, have a few beers with him, and go from there. In the event of a sale, I will filing with a professional who can do all of the dirty work for me. One last question I just thought of! If my current tenants are not interested in leaving, is there any material impact on postponing the sale? Based on the information as I understand it the amount of my tenure at the home is now not a factor. Each subsequent year I delay the sale will increase my tax obligation by the 20/25% * depreciation amount, plus any market growth that would widen the gap for a gain.
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May 9, 2014 21:45
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TraderStav posted:Thanks! I have enough to satisfy my question. I can safely assume a $1600-2000 impact on the sale ($7,994 gain based on 160k sale, 6% commissions, .0086% sales tax rate). I will now sit with my realtor to figure out valuation, have a few beers with him, and go from there. In the event of a sale, I will filing with a professional who can do all of the dirty work for me. I can't think of any material impact in delaying the sale. Since you're taking the property out of service, you can/should stop depreciating it.
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May 9, 2014 21:49
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Admiral101 posted:I can't think of any material impact in delaying the sale. Since you're taking the property out of service, you can/should stop depreciating it. If I delayed the sale I would rent it out again so it would be in service. Edit: I mean keeping my tenants in there
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May 9, 2014 21:54
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About 6 months after I quit my current job, I'll receive a large-ish deferred compensation payment -- regular income, US company. Is there anything special I should think about doing to minimize tax consequences? What I currently have in mind:
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May 10, 2014 06:20
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I have a question, hopefully confirming how I understand stuff. We're moving my wife and children over to my insurance because her (much smaller) employer is willing to pay for them to be on our (much larger) group plan. It saves her job their share of her insurance, breaks even on my side moving her insurance over to me (cash-wise around $600), and puts what we were paying out of pocket for her insurance back into our pocket (around $400 a month). So let me run through the tax implications for this to make sure I have it right: On my wife's check we are gaining $600 in income (even though it's being paid straight back into my plan, it has to go in as income on her check) and gaining $400 in taxable income (from what we're no longer paying OOP into her plan). So we're pocketing $400 but paying tax on an additional $1000. My wife and their financial lady did the math on that and it came out to breaking even in her check, which freaked us out initially. But on my side we are going to break even on losing that $600, but it will become UNtaxed income on my paycheck, which is where we'll end up making our money (as I figure it). So essentially we just end up breaking even on the $600 (becoming taxed on her end, becoming untaxed on my end) and paying full income tax on the $400, which is what we expected to do anyway. Huxley fucked around with this message at 20:05 on May 12, 2014 |
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May 12, 2014 19:32
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U-DO Burger posted:Follow up on this. Turns out the reason the taxes owed was so high was because the IRS assumed the cost basis of the investment fund was $0. I got a hold of the 1099-b form, only there's no cost basis listed on it. So now we get to wade through 20+ years of stock info to calculate the cost basis ourselves, so we can figure out what our actual tax obligation is. Final update on my investment woes. I went through all the numbers that Fidelity gave me and I determined that the capital gains that we actually got were only like 2% of what the IRS thought they were. So I compiled all the info and called the IRS to ask them how they wanted everything provided, to avoid half a year of back-and-forth. As it turned out, the customer service guy was able to just plug in the numbers I had right there. No need to fax or mail anything. And since we're dirt poor, we didn't owe anything either.  I must say, as frustrating as it is waiting an hour to speak with a customer service representative, they're actually really helpful once you get through. They really know what they're talking about, and they don't lead you around in circles. I'd read that revamping customer service was a major goal over the last decade, but I had no idea they'd gotten so competent.
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May 12, 2014 20:11
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Huxley posted:I have a question, hopefully confirming how I understand stuff. I think you have this correct although you put it in a very complicated way. Think about this from an end of year tax-time scenario: Her W-2: +$1000 Your W-2: -$600 Net extra W-2 income: $400, taxable. You may want to double check your withholdings (at both jobs) because her work paying her an extra grand per month may wreak havoc with how they withhold her taxes based on expectations of what bracket she'll be in. Do the math and figure out how much needs to be withheld to come in even.
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May 12, 2014 20:15
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I just received 500 RSUs from my company as a bonus. They are vesting in July. I understand that there are different tax implications for RSUs vs. regular stock options. Question is, what can I do to minimize my tax this year given the fact that all of the RSUs are vesting this tax year?
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May 16, 2014 17:43
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Shadowhand00 posted:I just received 500 RSUs from my company as a bonus. They are vesting in July. I understand that there are different tax implications for RSUs vs. regular stock options. Question is, what can I do to minimize my tax this year given the fact that all of the RSUs are vesting this tax year? Nothing, they're going to be ordinary income at whatever the FMV is on July 1. They'll show up on your W-2 though, so you don't need to do any additional gymnastics with them until you sell them. If you hold them for a full year after July 1, then any change in price from when they vested to when you sell will be treated as a long-term capital gain (or loss!), which may have a lower rate than ordinary income, but the big tax hit is coming this year no matter what. Generally when you receive RSUs, however, the company "sells to cover", wherein they sell off some of your shares (probably about 125-200 of them) and use the proceeds to pay the additional taxes you'll owe. So you may get a form reporting the sale, your W-2, and then end up with 300-375 shares of stock left you can dispose of some other time. If the company doesn't sell to cover, you will owe ordinary income tax on the full amount of your vested shares at EOY. Some brokers let you elect what to do; I'd strongly a sell to cover (or a 'net issue', if the company/broker lets you - this way there's not the annoying sales transaction involved you have to report.) Bisty Q. fucked around with this message at 22:08 on May 16, 2014 |
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May 16, 2014 22:05
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My wife is going to be working remotely and most of her living expenses are paid by the company. She will be getting an extra $2250 a month that will be grossed up to cover all additional tax burden. I just want to see if I am missing anything in my logic here. Federal - 28% OASDI - 6.2% MED - 1.5% State - 4.63% (Colorado) Total - 40.33% $2250 / .6 = $3750 (slight rounding) E: fixing my math since I wasn't accounting for paying taxes on the gross up portion. The contract states they will cover all additional tax costs but I would rather it be correct then have to ask them to cover it later somehow. Also if you are married can you check single on a w4 or do you have to do 0 withholdings and add in extra money as married? We are going to be firmly into the standard withholding is not close to enough as Dink's. Right now we both are at 0 and I withhold an extra $100 twice a month, that puts us just about even on the IRS online estimator. Thanks. spwrozek fucked around with this message at 01:29 on May 20, 2014 |
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May 20, 2014 00:17
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spwrozek posted:Also if you are married can you check single on a w4 or do you have to do 0 withholdings and add in extra money as married? We are going to be firmly into the standard withholding is not close to enough as Dink's. Right now we both are at 0 and I withhold an extra $100 twice a month, that puts us just about even on the IRS online estimator. Filing single when legally married is tax fraud, but you are generally free to put whatever you like on your w4 as long as the numbers work out at the end of the year. However, for most people, filing married on the w4 with zero withholdings will have less taxes taken out than one withholding as a single person. X withholdings married filing jointly != X witholdings filing singly
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May 20, 2014 00:55
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baquerd posted:Filing single when legally married is tax fraud, but you are generally free to put whatever you like on your w4 as long as the numbers work out at the end of the year. However, for most people, filing married on the w4 with zero withholdings will have less taxes taken out than one withholding as a single person. I was only looking at it from a withholding standpoint not a filing one. I just did my taxes for the year more or less and I will be adjusting my withholding to 0 + $500 per pay check to get everything to balance back out at the end of the year. I also figured out that we are going to pay basically $30K in federal taxes this year...gross.
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May 20, 2014 02:14
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Are there any federal incentives for using public transit? At the moment the only money I would save by using the rail is wear/tear since I would essentially break even on gas and I don't have car payments.
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May 20, 2014 14:06
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Sephiroth_IRA posted:Are there any federal incentives for using public transit? At the moment the only money I would save by using the rail is wear/tear since I would essentially break even on gas and I don't have car payments. You should be able to set aside $130/month pre tax to use for public transit.
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May 20, 2014 17:01
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Tyro posted:You should be able to set aside $130/month pre tax to use for public transit. neat. how? Could you link to an irs publication? Is that per individual?
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May 20, 2014 21:30
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Sephiroth_IRA posted:neat. how? Could you link to an irs publication? Is that per individual? Your company has to participate in a plan that lets you do it. Ask your HR people if the company offers "qualified transportation fringe benefits" or more succinctly if they participate in Commuter Check. And yes, it's per person.
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May 20, 2014 23:56
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Sephiroth_IRA posted:neat. how? Could you link to an irs publication? Is that per individual?
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May 21, 2014 00:11
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andale posted:About 6 months after I quit my current job, I'll receive a large-ish deferred compensation payment -- regular income, US company. Is there anything special I should think about doing to minimize tax consequences? What I currently have in mind: Bumping this question once. Is it trivial? Too complicated to answer without specifics? (Or: maybe this question falls under "asking how to cheat"? If so, I'd like to know that too.)
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May 21, 2014 05:45
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Bisty Q. posted:Your company has to participate in a plan that lets you do it. Ask your HR people if the company offers "qualified transportation fringe benefits" or more succinctly if they participate in Commuter Check. And yes, it's per person. If that costs my employer money then the answer is no. So in general unless it's an employer sponsored program there's no tax incentives for commuters to use public transit? Oh well. It's great for people that live right next to the rail and don't own a motor vehicle/don't want a car payment but otherwise I see little benefit to using it as an alternative to driving. Sephiroth_IRA fucked around with this message at 15:17 on May 21, 2014 |
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May 21, 2014 13:20
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edit - nm
GanjamonII fucked around with this message at 19:58 on May 21, 2014 |
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May 21, 2014 19:48
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My friends had a wedding scheduled at a venue that closed citing bankruptcy. They had paid the cost of the wedding in full as it is scheduled for this weekend. The owner of the bar is being charged with fraud and grand larceny related to IRS findings that resulted in the bars abrupt closing, NOT in relation to taking their and many other couple's money for wedding deposits. The police will not take a police report from them. From some cursory research it seems that declaring robbery as a tax deductible can only be done if it is in excess of 10% of your gross annual income, which it is, and then I am unclear on what level of police/official involvement there needs to be to qualify it as a robbery. They have receipts, the dude is out on bail right now but has already been formally charged, its been all over the news for the past two weeks. Anyone have any experience with reporting robberies and whether their situation will be able to qualify? Getting some money back on the return and possibly bringing them down a bracket could go a long way towards making up some of the lost funds. If you need more detailed information send me a PM, but any advice will help (yes, they will be seeking guidance on this specific issue come tax season but it would be nice to have a little more information going in).
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May 21, 2014 20:45
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Nephzinho posted:My friends had a wedding scheduled at a venue that closed citing bankruptcy. They had paid the cost of the wedding in full as it is scheduled for this weekend. The owner of the bar is being charged with fraud and grand larceny related to IRS findings that resulted in the bars abrupt closing, NOT in relation to taking their and many other couple's money for wedding deposits. The police will not take a police report from them. From some cursory research it seems that declaring robbery as a tax deductible can only be done if it is in excess of 10% of your gross annual income, which it is, and then I am unclear on what level of police/official involvement there needs to be to qualify it as a robbery. They have receipts, the dude is out on bail right now but has already been formally charged, its been all over the news for the past two weeks. Anyone have any experience with reporting robberies and whether their situation will be able to qualify? Getting some money back on the return and possibly bringing them down a bracket could go a long way towards making up some of the lost funds. If you need more detailed information send me a PM, but any advice will help (yes, they will be seeking guidance on this specific issue come tax season but it would be nice to have a little more information going in). Theft and Robbery are not the same thing.
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May 22, 2014 07:53
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EugeneJ posted:Theft and Robbery are not the same thing. They are for tax purposes (and fraud/misrepresentation also constitutes theft for tax purposes).
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May 22, 2014 11:34
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ThirdPartyView posted:They are for tax purposes (and fraud/misrepresentation also constitutes theft for tax purposes). There's rev. proc. 2009-20 but it doesn't look like it would apply here (not an investment scheme).
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May 22, 2014 17:02
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AbbiTheDog posted:There's rev. proc. 2009-20 but it doesn't look like it would apply here (not an investment scheme). Yeah, that revenue procedure deals with Ponzi schemes and the like because of Madoff, Stanford and the others in the last few years that came out from the crash in 2007 and 2008.
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May 22, 2014 19:56
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ThirdPartyView posted:Yeah, that revenue procedure deals with Ponzi schemes and the like because of Madoff, Stanford and the others in the last few years that came out from the crash in 2007 and 2008. I know, had to go through an IRS audit for this for one of my clients who had an investment loss. Ours was legit (guy got convicted) but it seems less than scrupulous people are selling this scam where you deduct your stock losses (usually capital losses) under this to get the ordinary loss treatment.
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May 23, 2014 00:05
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