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AbbiTheDog posted: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. I am a bit surprised that people think you can get away with that treatment.
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May 23, 2014 23:57
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If I take a sales tax deduction instead of an income tax deduction, can I deduct sales tax paid in other states? Or just my main state of residence?
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May 25, 2014 23:07
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For 2013 for federal purposes you can aggregate your sales taxes paid in all states.
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May 26, 2014 19:46
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seymore posted:I am a bit surprised that people think you can get away with that treatment. Once the auditor saw our backup (she had even "pre checked" court records before we showed up) the audit wrapped up in a hurry. I asked her about it later, that seems to be the new scam.
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May 27, 2014 16:34
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So its been a year and two weeks since I filled some amended returns in response to an audit, which were forwarded to audit reconsideration. At the time I was told by the IRS that they put a hold on any collection actions on the account (which is true, I have not received any of the angry CP-50X notices). No real correspondence from them since then on the topic except for the occasional "we are looking into it and need more time" letter. However, I was due for a refund this year, which they instead applied to the balance from last years audit. I got a couple of questions: a) Is it even normal for such a long time to drop by before hearing back on a reconsideration? I understand that my case may be somewhat non-standard (non-resident alien with a small audit balance), but i thought those things got resolved within 6 months or so... b) Would the IRS apply a refund towards an existing balance even though there is a hold on any collections actions on the account? Or did they decide to collect and just forgot to tell me? c) Who can I call to figure out some information on this? Last time I tried, all I could get out of the person on the phone was "Reconsideration takes a long time, please wait"
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May 28, 2014 18:31
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shodanjr_gr posted:So its been a year and two weeks since I filled some amended returns in response to an audit, which were forwarded to audit reconsideration. At the time I was told by the IRS that they put a hold on any collection actions on the account (which is true, I have not received any of the angry CP-50X notices). No real correspondence from them since then on the topic except for the occasional "we are looking into it and need more time" letter. However, I was due for a refund this year, which they instead applied to the balance from last years audit. I got a couple of questions: a) Yup b) Yup c) Typical. You could try the audit reconsideration unit, or if you're hitting stonewalls, try the taxpayer advocacy in your local city.
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May 28, 2014 20:28
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AbbiTheDog posted:b) Yup Ill dig up numbers for the reconsideration unit.
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May 28, 2014 20:38
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shodanjr_gr posted:Thanks for the response Abbi. Is this a yes to the second bit too ("decided to collect and forgot to tell me")? I haven't received any CP notices in a year. My understanding is that an offset (i.e. applying your refund to a prior year's account) is not a collection action per se, so the hold wouldn't apply.
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May 28, 2014 20:52
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scribe jones posted:My understanding is that an offset (i.e. applying your refund to a prior year's account) is not a collection action per se, so the hold wouldn't apply. Or that the two departments (collections and consideration) DON'T TALK TO EACH OTHER and always mess up collections.
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May 28, 2014 22:27
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AbbiTheDog posted:Or that the two departments (collections and consideration) DON'T TALK TO EACH OTHER and always mess up collections. Yeah but I actually verified over the one that there was a hold on collections a while back. Plus I assume that collections would actually be sending various notices if they were moving in on the balance...
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May 28, 2014 23:41
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shodanjr_gr posted:Plus I assume There's your problem.
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May 29, 2014 16:36
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AbbiTheDog posted:There's your problem. So is the solution to call collections directly and make sure that they aren't doing anything nasty e: Also, nothing related shows up on the IRS online transcript. shodanjr_gr fucked around with this message at 16:46 on May 29, 2014 |
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May 29, 2014 16:43
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shodanjr_gr posted:So is the solution to call collections directly and make sure that they aren't doing anything nasty Yes, calling the IRS can be frustrating, but that is your next step.
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May 30, 2014 01:50
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Jeopardy levies everyday.
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May 30, 2014 01:57
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seymore posted:Yes, calling the IRS can be frustrating, but that is your next step. OK you guys got me appropriately freaked out. I'll give them a call.
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May 30, 2014 04:51
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Dumb question I probably should know the answer to but is the extra money I give the government tax free? Like if I apparently owe $3000 to the government in a year but give them $5,000 instead is that extra $2,000 untaxed? I'm heavily leaning toward No of course not but it does seem like it would be a good incentive for people to give the government more money during the year. Are there any benefits to giving the governement more than you owe in a year?
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May 30, 2014 17:41
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You are just giving them an interest free loan and missing out on any return you would make by investing the money. Your tax is the same no matter how much you give them or don't during the year. What you have paid just adjusts what you owe.
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May 30, 2014 18:00
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Yeah that's what I always assumed but I was struck by the idea that money today is typically more valuable than money tomorrow so I wondered if the government offered some kind of incentive for giving them more money now and a reward for doing so later.
Sephiroth_IRA fucked around with this message at 18:26 on May 30, 2014 |
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May 30, 2014 18:01
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Sephiroth_IRA posted:Yeah that's what I always assumed but I was struck by the idea that money today is typically more valuable than money tomorrow so I wondered if the government offered some kind of incentive for giving them more money now and a reward for doing so later. Contributions to reduce the debt held by the public are fully tax deductible. Mail your check payable to Bureau of the Fiscal Service to: Attn Dept G Bureau of the Fiscal Service P. O. Box 2188 Parkersburg, WV 26106-2188
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May 30, 2014 18:19
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Yeah, no thanks. I think I'll stick to giving them as little as I need to.
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May 30, 2014 18:28
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There's a good chance I'm going to wind up over the income limit for Roth IRA contributions, but I've been contributing all along this year not thinking my income would change substantially. How can I avoid being penalized? In my Googling I've seen advice that I can just withdraw my contributions for the year penalty free and not report them, but that seems like a big loophole. What would then prevent me from parking a bunch of money in a Roth IRA 364 days per year so that it can accumulate tax-free gains?
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May 30, 2014 20:38
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Sock on a Fish posted:There's a good chance I'm going to wind up over the income limit for Roth IRA contributions, but I've been contributing all along this year not thinking my income would change substantially. How can I avoid being penalized? You have to withdraw the earnings as well and they are fully taxable as of the year of the contribution itself to avoid precisely that situation. Edit: From Publication 590 (Page 67): "Withdrawal of excess contributions: For purposes of determining excess contributions, any contribution that is withdrawn on or before the due date (including extensions) for filing your tax return for the year is treated as an amount not contributed. This treatment only applies if any earnings on the contributions are also withdrawn. The earnings are considered earned and received in the year in the year the excess contribution was made." Horseshoe theory fucked around with this message at 22:21 on May 30, 2014 |
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May 30, 2014 22:17
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Ah, that makes sense. So I'd just end up paying regular short term capital gains on the withdrawn earnings? No extra penalty for being bad at predicting changes in income?
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May 30, 2014 22:43
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Sock on a Fish posted:Ah, that makes sense. So I'd just end up paying regular short term capital gains on the withdrawn earnings? No extra penalty for being bad at predicting changes in income? I'm pretty certain the distribution of the earnings is taxed as ordinary income on line 15b of the Form 1040 (just like it is when you withdraw from a traditional IRA). And I believe you are subject to the 10% early withdrawal penalty (which applies until you're at least 59.5 years old), but only on the income/gains from the excess contribution (and not the excess contribution itself) but not the 6% excess contribution penalty, so long as you withdraw before the filing deadline (including any extensions taken).
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May 31, 2014 23:51
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ThirdPartyView posted:I'm pretty certain the distribution of the earnings is taxed as ordinary income on line 15b of the Form 1040 (just like it is when you withdraw from a traditional IRA). And I believe you are subject to the 10% early withdrawal penalty (which applies until you're at least 59.5 years old), but only on the income/gains from the excess contribution (and not the excess contribution itself) but not the 6% excess contribution penalty, so long as you withdraw before the filing deadline (including any extensions taken). Set the money aside from here on out and do your taxes in the spring. You have until 4/15 of the following year to do a retroactive Roth IRA contribution, so you can prepare your taxes and see if you are eligible before making the contribution. I wouldn't pull out the funds until you prepare your taxes just in case. It's based on AGI, so throwing funds into your company sponsored plan (if you can) would be the first place to look at to drop your income to eligible levels.
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Jun 2, 2014 16:43
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AbbiTheDog posted:Set the money aside from here on out and do your taxes in the spring. You have until 4/15 of the following year to do a retroactive Roth IRA contribution, so you can prepare your taxes and see if you are eligible before making the contribution. Yep, that's what I'm doing now. I'll just redirect it toward a non tax advantaged account, and deal with withdrawls, etc. at tax time. Thanks!
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Jun 2, 2014 17:19
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I think I might be in trouble. Earlier this spring I filed for an extension to get all my tax information in order because I was going to jointly use my parents accountant, and was still collecting all the applicable information. Just now I finally got my report back from my accountant and it appears that they've failed to account for all of my 1099 income, representing about 93% of my taxable income last year. At this point in time, it appears that there are two possible failure modes. Either the accountant received the forms and proceeded to lose them, or they were lost between me handing them to my mother to send to the accountant. What in the living hell am I going to do now?
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Jun 7, 2014 00:18
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QuiteEasilyDone posted:I think I might be in trouble. Earlier this spring I filed for an extension to get all my tax information in order because I was going to jointly use my parents accountant, and was still collecting all the applicable information. Just now I finally got my report back from my accountant and it appears that they've failed to account for all of my 1099 income, representing about 93% of my taxable income last year. At this point in time, it appears that there are two possible failure modes. Either the accountant received the forms and proceeded to lose them, or they were lost between me handing them to my mother to send to the accountant. What in the living hell am I going to do now? File a late return, pay a penalty, go on with your life.
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Jun 7, 2014 00:48
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How are late returns handled when both the state and federal show a refund due? Penalties are usually a percentage of the tax liability, right, so does that just mean someone gets their refund later?
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Jun 7, 2014 00:57
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QuiteEasilyDone posted:I think I might be in trouble. Earlier this spring I filed for an extension to get all my tax information in order because I was going to jointly use my parents accountant, and was still collecting all the applicable information. Just now I finally got my report back from my accountant and it appears that they've failed to account for all of my 1099 income, representing about 93% of my taxable income last year. At this point in time, it appears that there are two possible failure modes. Either the accountant received the forms and proceeded to lose them, or they were lost between me handing them to my mother to send to the accountant. What in the living hell am I going to do now? If the return was already filed, file an amended return with the additional income. And maybe get a new accountant.
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Jun 7, 2014 02:21
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sullat posted:If the return was already filed, file an amended return with the additional income. And maybe get a new accountant. I've found the documents between folders in the 'filing system', I can't say that I'm shocked really given the hilarious string of gaffes I'm starting to find in all of my financial accounts setup under my mothers authority. Lesson learned.
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Jun 7, 2014 02:56
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NancyPants posted:How are late returns handled when both the state and federal show a refund due? Penalties are usually a percentage of the tax liability, right, so does that just mean someone gets their refund later? Nothing happens, you're just stuck filing a paper return (they will not e-file late returns). Note if you wait too long federal and state governments will not give you your refunds (three years late). They just keep them.
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Jun 9, 2014 17:13
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Can a 1031 exchange be done in a situation where 3 properties were purchased together in a package, with a single purchase price and a loan covering the entire package, and then one of the properties is re-sold separately from the others? How would you figure your cost basis for 1 of the 3 properties in the package in a way that the IRS would like?
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Jun 10, 2014 13:06
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DNova posted:Can a 1031 exchange be done in a situation where 3 properties were purchased together in a package, with a single purchase price and a loan covering the entire package, and then one of the properties is re-sold separately from the others? You can exchange into and out from multiple properties as long as you meet the timing/value requirements. The basis allocation would be based upon the FMV of the properties at the date of purchase (do something reasonable and you should be ok). Edit: As long as you're exchanging section 1250 and section 1245 property for more section 1250 and section 1245 property you should be fine, you don't need to exchange commercial property for commercial property for example.
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Jun 10, 2014 17:13
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AbbiTheDog posted:You can exchange into and out from multiple properties as long as you meet the timing/value requirements. The basis allocation would be based upon the FMV of the properties at the date of purchase (do something reasonable and you should be ok). Alright, thanks.
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Jun 10, 2014 17:46
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DNova posted:Can a 1031 exchange be done in a situation where 3 properties were purchased together in a package, with a single purchase price and a loan covering the entire package, and then one of the properties is re-sold separately from the others? I have recently been through a audit on behalf of a client and as AbbiTheDog stated as long as you use a sensible method of allocating price per property then you should be fine. Also please note that a few agents are somewhat knowledgable in this area, a lot are not.
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Jun 10, 2014 17:57
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seymore posted:I have recently been through a audit on behalf of a client and as AbbiTheDog stated as long as you use a sensible method of allocating price per property then you should be fine. Also please note that a few agents are somewhat knowledgable in this area, a lot are not. Hey let me ask you guys another question, because I am getting answered both ways by other sources. Say I want to 1031 a property that is now worth $100k, basis price $50k, and purchase something worth $80k. Is that legal to do under 1031 rules? If so, I assume I would pay capital gains on the $20k surplus (ignore depreciation for this hypothetical) while rolling over the other $30k in gains into the new property without being taxed on that portion. Most sources say the new property must be higher in value, but a few sources say that you may be taxed on excess and for depreciation recapture, so that leads me to believe it's possible either way.
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Jun 10, 2014 19:26
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DNova posted:Hey let me ask you guys another question, because I am getting answered both ways by other sources. Say I want to 1031 a property that is now worth $100k, basis price $50k, and purchase something worth $80k. Is that legal to do under 1031 rules? If so, I assume I would pay capital gains on the $20k surplus (ignore depreciation for this hypothetical) while rolling over the other $30k in gains into the new property without being taxed on that portion. 1031 is not an optional code section. There is no "choice" in whether you do it or not - if the transaction qualifies, you have to defer the gain/loss. I'm assuming by "basis price" you mean "adjusted basis" (original cost minus accumulated depreciation). If the property exchange is a 1031 exchange, you will defer the entire gain - meaning you pay capital gains on nothing (neither the 30k depreciation recapture nor the 20k surplus). The new property can be either higher or lower in value. The value of the new property is irrelevant for 1031 purposes. What matters is when you receive cash in addition to receiving the new property. Then a portion may be a taxable gain. Also note that states may or may not recognize like kind exchange treatment, so you may have a gain for state purposes.
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Jun 10, 2014 20:39
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Admiral101 posted:1031 is not an optional code section. There is no "choice" in whether you do it or not - if the transaction qualifies, you have to defer the gain/loss. It seems like you are saying some contradicting things. To clarify my post, by "basis price" I meant the original FMV or purchase price, ignoring depreciation to simplify the example. You say that if the exchange is a 1031 exchange, I will defer the entire gain and pay capital gains on nothing. But then you go on to say that if I receive cash in addition to receiving the new property (which is exactly what the surplus is in my example) that it may be a taxable gain. The latter is how I understand the section 1031. And the "may" in "may be a taxable gain" means that it is almost definitely taxable subject to the rest of the entity's tax situation. Am I off base here?
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Jun 10, 2014 20:45
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DNova posted:It seems like you are saying some contradicting things. To clarify my post, by "basis price" I meant the original FMV or purchase price, ignoring depreciation to simplify the example. I misinterpreted the terms you were using in your example, specifically what you meant by "surplus". If you received 20k of cash and a 80k valued property in exchange for your 100k valued property, your taxable gain for federal purposes would be 20k. Your taxable gain for state purposes may be 20k, or it may be 50k. It depends on the state. I should also ask if either of these properties have mortgages attached to them. For simplification, I assumed neither have mortgages.
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Jun 10, 2014 22:22
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