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Client received a tax notice over a 1099-Q for a state QTP distribution. The recipient of the 1099Q is not the beneficiary, and I'm not sure why she's receiving a notice claiming that she owes tax. Even if the distribution wasn't used for educational purposes (which it was), the tax/penalty is the burden of the beneficiary - not the benefactor. Any of you have a clue on what the deal is? Now that I think about it, how does the IRS even know who the beneficiaries are? The social security numbers aren't listed on the 1099's.
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Mar 9, 2011 00:17
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quote:I want to make sure I got this right. Tax stuff is way over my head and I hate dealing with it. I usually just take a standard deduction (dependent status since I started filing) and am done with it. I'm not sure what you mean when you say "[you're] a W-9" - but I'm guessing that you mean you're classified as an independent contractor for tax purposes, and you receive 1099-Misc from those who pay you. How much you should be putting aside for taxes varies with your income, but 25% is recommended probably because you'll also be paying self employment tax. Depending on how much you're making, you may also need to be making estimated tax payments throughout the year (though that's a different subject). The number of states you are working/living in is irrelevant for federal tax purposes. I don't know what you're referring to when you refer to an 'automatic deduction on new W-9ers'. Can you provide a source? What schedule are you reporting your income on? It sounds like it should be schedule C, but your situation isn't very clear.
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May 24, 2011 14:04
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nevermind.
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Jun 4, 2011 00:27
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quote:In your situation you will probably take the standard deduction, so you can't deduct your plane ticket. He could deduct the cost of the plane ticket as an adjustment to arriving to AGI (as moving expenses). He doesn't have to itemize to do this. See line 26 of page 1. quote:
You would separately report the income and mortgage interest on schedule E. Don't forget about depreciation, any utilities you pay for, property taxes, etc. Also keep in mind that any depreciation you take may need to be recaptured when you sell it. quote:Can someone help me with figuring out 1099 taxes. I have a job offer for 25 dollars an hour. So I assume a monthly income of 4000. I went through a tax calculation to try and figure out my take home after I have to figure all the taxes myself. The number I get following this formula is 2240 take home. That seems brutal is that right? Can someone link me to a proper formula for quickly figuring this out please? $25 an hour on a 1099? Are you a legitimate independent contractor (as in, do you do "work" for several different clients) or are you actually an employee and your employer is just trying to weasel his way out of paying payroll taxes. It sounding like the latter, and this is very illegal. Not to mention you're getting screwed here from a tax perspective. If you're receiving a 1099 instead of a W-2, you'll have to report the income on a schedule C. This income net of expenses will be subject to self employment tax (15.3%). Unlike a W-2, any job expenses you may have is fully deductible against your income. So, pretending you have 48,000 in income, and 5,000 in job expenses (licenses, tools, whatever): you would multiply 43,000 times 15.3%. This would be 6579. This number would be reported on line 56 of the 1040. Because you are paying what technically should be the employer's portion of payroll tax, half of this 6579 will be deductible on line 27 of the 1040. In this case, it would be 3290. Do you pay for your own health insurance? If you do, this may be deductible as well. You will also have to pay your regular state, local, and federal income taxes. Assuming you are single, use the standard deduction, and have no dependents: (with 2010 numbers) 43,000-3290-5700-3650=30360 = your taxable income. From this, 4138 would be your tax liability for federal income, assuming you had 5000 in work expenses and no other income. 4138 + 6579 = 10,717 as total federal tax liability excluding any credits you may be eligible for (such as Making Work Pay). I don't know what your state or local tax rates are. Keep in mind that for 2011, some of the numbers change. Self employment tax will be 13.3% for 2011 and the Making Work Pay credit won't exist, for example. But this is a rough example to explain how this works. It sounds more complicated than it is, but I recommend spending 50$ on a copy of turbo tax. Don't do your taxes by hand. Also, I can't really overemphasize how shady it is to be paid through a 1099 when you're effectively an employee. You're getting screwed from a tax perspective. Admiral101 fucked around with this message at 14:15 on Jun 10, 2011 |
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Jun 10, 2011 14:13
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quote:So let's assume my home was appraised at 137,500, this means I can deduct $5,000 off of my taxes each year? (savings of my tax rate * 5,000) First question: Not necessarily. You'd be deducting the depreciation against your rental income. If your rental expenses/depreciation exceeds your rental income (as in, you have a rental loss), you'll have a passive loss because rental activities are passive activities. You would only be able to deduct this loss against other passive income (as in, rental income from other properties or income from businesses that you dont materially participate in). In other words, this loss is not particularly beneficial. The vast majority of rental properties operate at a loss. Second question: Keep in mind, if you sell the property after two years, you may still take the homeowner's exclusion presuming that the property was your primary residence for at least three years out of 5 years prior to date of sale. However, the homeowner's exclusion will not exclude depreciation - so any depreciation you take will have to be recaptured (as in, reported as income). If you sell it at a loss, you may still have to recapture some of the depreciation. For example, if the value is 127,500, and you depreciate 10,000, and then sell the property for 125,000 - you'll have to recapture 7,500 of that depreciation. If you sell it after three or more years, you won't have the homeowner's exclusion, and you'll have to report the sale as a normal sale of a rental property (as in, report the total gain). And keep in mind that you should only worry about an appraisal if you reasonably believe the FMV is less than what you paid for it. That sounds like the case here, but just restating. Admiral101 fucked around with this message at 14:34 on Jun 13, 2011 |
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Jun 13, 2011 14:32
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quote:I'm just poking a little fun, don't take it personally. The exam actually does test on a variety of taxation and finance topics. Only two sections are "pure" accounting.
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Jun 13, 2011 19:00
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quote:I searched through and a definitive answer was not posted. Essentially what is happening here is that your dad is giving you 14,000$? I don't see any tax implications for you for this. Is there a reason that you think there would be? Admiral101 fucked around with this message at 00:58 on Jun 18, 2011 |
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Jun 18, 2011 00:55
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quote:I just thought that since is sort of like a temporary "gift" I would get charged with taxes or something. I read that international transfer of money considered a "gift" that exceeds 14000 dollars is taxable This sounds/smells like a gift. Gifts are never taxable to the recipient, only to the giver. In this case there's nothing to worry about. The limit for your dad and his spouse (assuming he's married) is 26,000 for 2010. quote:I don't know anything about Japanese tax law so I have no idea. The dad is not in the US and therefore our rules do not apply. If his dad is still a US citizen, he's still filing his US taxes even though he lives in Japan - no?
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Jun 18, 2011 15:31
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quote:The phone recording suggested I could email (!?) a copy of my W-2 and the Notice of Deficiency to the Department of Revenue, or send them a letter with the same information. ...just do this? After a brief google, I found that Colorado requires individual filers to attach a copy of their W-2 to their individual income tax return. You should do this in the future to avoid notices. I'm guessing you paper filed?
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Jun 27, 2011 01:27
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How are you possibly claiming six exemptions when you're single with no dependents? What is the IRS calculator listing as your six exemptions? That said, 25% FIT is excessive for a half year job with a salary that is 'very small'. 5-10% is likely more realistic, if that, but it's hard to say without actual numbers.
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Jul 14, 2011 21:05
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Assuming you earn 17,500 for the second half of 2011, and you earned 8,750 through temp work in the first 5 months: Your taxable income = 8750+17500-5700-3750 = 16800 If this is your only income, and you won't be officially married before the end of the year (you mentioned a fiance), you will have roughly $2100 in tax liability. How much you should have withheld in your new job depends on how much was withheld from your previous temp job.
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Jul 14, 2011 21:30
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quote:I have a friend who just got screwed by someone that she used to nanny for. Yesterday she got a letter from the IRS stating that she owes $903 in back-taxes from the year 2009. The people who she used to nanny for decided (without telling her) that they were going to declare her payments on their taxes without giving her a W2 or anything like that. I'm wondering if there's anything she can do to avoid this or get the payment lowered or get her on a payment plan if there's no way out of it. I really doubt your friend didn't realize that they would be deducting her babysitter payments on their taxes given that they would need to have her social security number to do so (which means she gave it to them). With that said, her best option is to call the IRS and see if a payment plan can be worked out. Her situation is not that uncommon. Ignoring the notice is the absolute worst thing she can do.
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Jul 23, 2011 22:43
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quote:I'm planning on giving an entire month's wages on a 1099 gig to charity. How do I go about processing that so I can actually claim it? Not sure what you mean about "processing" it. You would claim whatever amount you donate on Schedule A as an itemized deduction.
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Aug 2, 2011 19:21
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quote:I hope this is in the right place. Gifts are never taxable to the recipient. There are no tax implications to you receiving a $5,000 van. You would not be reporting the van on your tax return. If the value of the van was much higher, your parents would have certain filing requirements, but that is not the case here.
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Aug 26, 2011 21:04
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quote:I graduated a long time about, but thanks for the reply I guess. I suggest teaming up with poofactory for your new venture in evading US taxes. Maybe you two can scrape together the $5,000 needed for an accountant that specializes in international taxation to think about your idea for an hour before deciding to just tell you it doesn't work like that.
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Sep 15, 2011 11:55
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quote:I did use google and that is what caused the confusion, I was told by the person in accounting to plan on saving one percentage and google was coming up with another that's why I was looking for clarification. I will receive the 1099 tax form. So I will only be paying the self employment tax that is 15.3%, so if I were to save every penny of that percentage I wouldn't have to pay any other taxes to anything payroll related? Let's say you make 50,000 on your 1099. You pay 13.3% on that 50,000. That's only payroll taxes. You also pay income tax on that same 50,000 (though you can deduct a portion of the self employment tax from that 50,000). From the fact you're referring to the person who hired you as your "Boss" and talking to people in "accounting", I'm somehow doubting you're an independent contractor, and are just getting scammed by someone who doesn't want to pay their share of payroll taxes.
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Oct 6, 2011 01:44
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quote:I have been doing freelance consulting for a couple of years on the side, never making enough to declare it as anything other than "other income". I am operating without a business structure or tax id. In terms of "obvious" stuff: 1. You didn't mention mileage. I'd assume that for consulting work, you'd have a degree of traveling. 2. Where does your health insurance come from? 3. You would want to run your business in a separate entity if you want to charge yourself rent. You could feasibly depreciate the studio in your schedule C if it's used for business full time. You will want to talk with an accountant before doing this.
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Oct 20, 2011 03:33
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quote:3) Is there any reason to consider anything other than an LLC? A single member LLC would just be reporting the income/expenses on your Schedule C. Single member LLC's are not recognized at the federal level. If you actually wanted to rent to yourself, you would need to form a C-Corp or LLC and file for an S-election. You would not be paying any SE tax, but you would have to pay yourself a "reasonable" wage. Note that all this would require keeping actual financial records, and likely hiring an accountant every year. While I don't know your bracket, I really doubt the tax savings on this would be worth the accounting fees/aggravation. If you expect the consulting business to grow, it's worth going for, but otherwise just make your studio an office. quote:Got it. How do I find a good one? I don't really know anyone else that is as low-end as me. Most of our client base comes from word of mouth. I recommend asking friends. quote:I read the OP and I saw the part where you said that MFS is almost never advantageous, but I think it might possibly be this situation, but I may be overlooking something. The OP is discussing the viability of MFS strictly from a tax perspective. While both of you would lose the student interest deduction, that wouldn't make up 10k a year. You didn't mention whether you itemized or not, but both of you would have to itemize, or both would have to take a (50%) standard deduction. Admiral101 fucked around with this message at 19:58 on Oct 20, 2011 |
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Oct 20, 2011 19:51
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flowinprose posted:If you're paying her in "cash" and she isn't reporting it as income, then she's breaking the law. If that's the case, then she's probably not going to be too keen on giving you some type of receipt/invoice showing you what you've paid her for child care that you would need in order to get reimbursement from the child-care account. To elaborate on this: There is no problem with paying in cash. You don't -need- an invoice to report the credit, though documentation is always nice. What is needed is the woman's social security number and address (or the EIN number if she's through a business). If she's not reporting the child care on her taxes, however, she may get a notice from the IRS.
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Nov 9, 2011 13:41
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quote:I have a question regarding profit from stock purchases. I have done quite a bit of reading, but I wanted to see if I could get a plain-english answer here. You will be fine for 2011. For 2012, you will need to make quarterly estimated tax payments, presuming your tax owed in 2011 (tax liability minus withholdings) is in excess of $1,000. The amount of payments you make in 2012 is not necessarily related to the profit you realize in 2012. The payments are based on the tax in excess of withholdings in 2011. So: Assume for 2011 you had 30,000 of withholdings, and owe 38,000 total in tax. You would need to make $2,000 payments each quarter in 2012 to avoid penalty on your 2012 tax return. Also, I am assuming that your AGI in 2011 is less than $150,000. This link may be helpful to you: http://www.irs.gov/businesses/small/article/0,,id=110413,00.html Remember that all of this is irrelevant if the tax owed at the end of the year is less than $1,000.
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Nov 20, 2011 05:01
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quote:per AbbiTheDog, "Education expenses to train for a new profession are not deductible as business expenses." http://forums.somethingawful.com/sh...0#post394578792 Whoa now, Abbi was referring to deducting business expenses on Schedule A. TotallyGreen is asking about running a tuition reimbursement program for his employees through his company. This is not the same as an individual deducting his higher education expenses as a business expense. TotallyGreen can do this, and deduct the expense. Any tuition expenses would have to reported on the employee's wages as income, unless TotallyGreen has a educational assistance program, which Furu linked. Educational Assistance programs have separate rules, and the idea is that the first $5,250 of tuition payments by the employer to the employee's tuition expenses can be excluded from the employee's wages. It has nothing to do with deducting the expense from the employer's perspective. The employer can deduct the expense regardless of what the employee is studying, as long as the tuition is being reported on the employee's W-2. It's just a different form of compensation. Again, I'm assuming the employee in question is not related to TotallyGreen. Admiral101 fucked around with this message at 23:46 on Nov 21, 2011 |
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Nov 21, 2011 21:19
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quote:I'm about to start a new job and I've decided that I'd like to take home as much of my paycheck as possible and pay any taxes I owe at the end of the year. In order to do this, how many deductions should I be looking to take? After shaking my magic 8-ball, it recommends "Yes"
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Nov 28, 2011 21:51
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quote:I just started getting paid at my new job and am very confused about the change in how this state does things. I was getting paid by the state of Texas. There I got paid a salary, and my benefits were just benefits, I didn't have to pay my health insurance deductible. It sounds like your employer is just having you pay for part of your health insurance premiums. This is not uncommon. It also sounds like you have an option to elect out of the medical insurance in favor of a slightly higher salary. This isn't uncommon either. It has nothing to do with living in Texas vs Maryland, except for how those governments evidently handle their employees' medical insurance. You can potentially deduct these premiums on your taxes. However, you first have to itemize on your taxes. Second, your total medical expenses for the year have to exceed 7.5% of your agi. Your AGI is just your salary/income less any adjustments such as student loan interest or moving expenses (you may want to look into the latter - unreimbursed moving expenses are potentially deductible for you regardless if you itemize or not). If your medical expenses do exceed 7.5% of your agi (which it probably doesn't), then the excess is deductible from your taxes. It's a lovely deduction in general.
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Nov 30, 2011 22:18
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quote:Hey guys, small non-profit income tax question but kind of a weird one. Disclaimer: my experience with nonprofits isn't extensive. That said, your landlord can't "write-off" free rent to a charity. He has no incentive to do this for you, outside of being nice. Where were you getting this $5,000 value? -it's not true. Filing requirements can vary, but if you're an active nonprofit, you're going to invariably have some flavor of filing to do. If you really want to do this, you're better off just running it, doing slightly more than break even every year and just reporting it all on schedule C. Plus I doubt "letting people play bejeweled and browse facebook on old computers" would count as a charitable mission in the eyes of the feds. edit: you may be thinking of the 25,000 gross receipts threshold - but that's just a simplified filing, not a nonexistent filing. quote:I recently completed a Masters Degree in Managing IT while working full time in IT. Is the cost of my education tax deductible in some way since I was paying for education to improve my job skills? There was a case last year where a nurse won a lawsuit with the IRS because she had written off her MBA as career related but my situation should be more straight forward, no? You will want to read this: http://www.irs.gov/publications/p970/ch12.html But short version is: unless you're leaving something particularly relevant out, probably not. Besides, if you're claiming the lifetime learning credit (which is much more advantageous), any expenses you used towards that credit would be ineligible for use to be deducted elsewhere. Education benefits/deductions vary widely from state to state, but at the federal level you're covering your tax benefits with that credit. Admiral101 fucked around with this message at 23:59 on Dec 2, 2011 |
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Dec 2, 2011 23:49
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quote:e;f;b, but Admiral you have just been lawyered. That will teach me to attempt non-profit questions  - though I make it a point to stay ignorant in that area. Aggravating work with little real payoff.
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Dec 3, 2011 00:49
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quote:2. Would it be a good idea to file my taxes separately? If so, what are some things I would need to take care to note while filing taxes? In addition to what Furu said, note that even as a dependent you have to file your own taxes if you have income. You're always "filing separately" regardless of if you're they're dependent or not.
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Dec 5, 2011 13:42
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quote:Ya, I'm not trying to do anything fancy with retirement accounts. I got an underpayment penalty last year and have been withholding more this year to avoid a penalty (in lieu of estimated payments). Turns out I withheld way too much because our profit is much lower this year. So my plan is to go back to normal withholding next year and just pay the penalty (gladly since we made a nice profit) if needed. quote:If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have an underpayment of estimated tax and you may have to pay a penalty. Avoiding underpayment penalties doesn't need to be a guessing game.
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Dec 12, 2011 21:09
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quote:I have been withholding enough to equal the amount from last year, as in "the total of your withholding and estimated tax payments was at least as much as your 2010 tax " I misread your post. You are correctly interpreting the safe harbor rules. Most in your situation handle most of their withholding through a year end bonus of some flavor, though (as opposed to withholding evenly throughout the year).
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Dec 12, 2011 22:46
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quote:I did a lot of independent contractor work this last year. It was my first year doing it through some online sites, and I doubt I made anymore than $2000 or so at it in addition to around $6000 gambling winnings. You have to make the estimated tax payments quarterly over the year to avoid interest/penalty, so it's essentially too late at this point. However, if you are going to owe less than $1,000 in tax at the end of the year, you don't need to worry about anything. And remember to deduct your gambling losses, if you haven't.
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Dec 27, 2011 19:39
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How often is your photography equipment used for personal stuff versus how often is it used for this business? Are you treating this as a legitimate business (as in, are you actively looking for gigs, and do you have a profit motive for doing this?) or is this something you do as a hobby and the cash you earn is just incidental? I'm assuming that the camera/lenses you purchased see a lot of personal use, and you'll have to depreciate them accordingly. For example, the Cannon 52d camera that you purchased for $2100: If you used this personally 50% of the time, you would only be able to depreciate (write-off) up to $1050 of the cost. Admiral101 fucked around with this message at 22:12 on Dec 27, 2011 |
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Dec 27, 2011 21:22
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quote:I also do concert photography like once a month in exchange for free tickets / comped stuff but all of that is off the books / no cash. Is that something I should factor in? Noncash compensation is taxable at fair market value. I'm sure there's going to be multiple opinions on your situation, but this is mine: 1. I would ignore the equipment sold in 2011. Most was sold at a loss, and since they were only used in 2009 and 2010 (non-business years) there's nothing that can be done with those losses. You did realize $100 gain on one camera, which is theoretically taxable, but there's nobody on the planet who is going to care. 2. If you do have profit motive with the club gigs, you should report that income on Schedule C. Note that you will have to pay self employment tax on any profits you realize. 3. I would treat the cameras you purchased in 2011 as 50/50 personal use and business use. The correct way of doing this is to capitalize the cameras and depreciate them (but since this is 50/50 personal/business, you will only be able to depreciate 50% of the cost - so for the previously mentioned example, you will depreciate $1050). You can then fully depreciate the asset with 179*, meaning all the expense will be recognized in 2011. Note that if you later decide to resell that asset, you will have to recapture some or possibly all of that depreciation. You can also simply expense all $1050, but that is frowned upon in most circles. 4. Your mileage to and from the gigs are deductible at the standard business mileage rate, which is $0.51 in 2011. So if you drove 100 miles, you can deduct $51 as an expense. Note that you can't expense vehicle fuel if you are doing this. 5. The websites would be deductible if it is part of the service you provide the club. This assumes you are not hosting personal photos on these websites. 6. Document everything. Keep receipts. 7. Last thing to note here is that, after you record all these expenses, you may come out with a loss. If you continue to come out with losses, the IRS will scrutinize your return, and may decide to declare the entire thing a hobby (this is bad). I think this covers most everything. It's not as complicated as I'm describing, I'm just attempting to be comprehensive. Admiral101 fucked around with this message at 16:53 on Dec 28, 2011 |
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Dec 27, 2011 23:56
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quote:This might stray in to "do my taxes for me" range, in which case, kindly tell me to find out on my own or whatever. So, no hard feelings there if that's the case. Your situation is well within the capabilities of turbo tax. And the equipment should be capitalized as opposed to expensed. With 100% bonus depreciation, there really isn't a difference either way (which is why I said expensing is acceptable), but capitalizing and depreciating is correct (which is why I said expensing is frowned upon). Start up costs are an entirely different animal. That's essentially money you spent on the business before actually engaging in the business (eg: if you spent 10k on consultants to figure out how to properly organize and run your business, that would be capitalized and amortized over time). edit: I just realized the cameras you purchased in 2011 are used, and not eligible for bonus depreciation. You can still use 179, which is (for your purposes) identical and will permit you to depreciate the camera/lenses in one year. see: http://www.irs.gov/publications/p946/ch02.html I blame Furu for not correcting me. Admiral101 fucked around with this message at 16:55 on Dec 28, 2011 |
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Dec 28, 2011 13:29
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quote:I'm self employed but my jobs are varied within an industry (all 1099 though). I started commuting exclusively this year by train. I'm wondering if I can deduct the travel? I've heard varying opinions..To be clear I'm not using public transit to commute to one specific office everyday, rather I'm traveling, sometimes via different methods (NJT, LIRR, Metro North, etc) to go do work for hire and incurring the cost of travel out of pocket 70-80% of the time with the other 20% or so being successful negotiations for travel to be covered by the contractee. Being able to deduct travel would be a big deal.. You are able to deduct travel expenses for work, presuming that it is not part of a normal office commute, and you aren't doing it for personal reasons. Your situation sounds fairly textbook. Just remember to not expense reimbursed travel expenses unless you are also including the reimbursement as income. As for records, I would assume a bank statement would be sufficient. Just make sure to record the locations of the various locations you travel to.
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Dec 29, 2011 01:09
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quote:You are legally not allowed to file until you have your W-2 in hand. If you feel like getting bent over and ripped off you can try one of the retail preparer offices and sometimes they will give you an advance based on your pay stub. Isn't that illegal now?
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Jan 6, 2012 22:19
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quote:Way in over my head right now. The IRS notice will not include your basis in the shares (eg: how much you paid for them) - so if you paid $500 for the shares, and sold them for $600, the IRS will tax you for the entire $600 instead of just your $100 gain. I also believe that the IRS will assume that your sales are short term - as in, you held them for less than a year before selling them. You need to provide the IRS with documentation on the basis of the shares you sold, as well as the acquisition/sale dates. The notice should have included a phone number for you to call, or a place mail the information they need. Yes, call the toll free number. If you are indeed below the poverty line, and you held these shares for over a year, you will not owe any tax on whatever gains you realized (long term gains have a 0% tax rate for people below the 25% bracket).
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Jan 11, 2012 15:42
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quote:Fantastic, thank you so much! The shares were purchased by my grandfather for my college education like $10 years ago, when I was a child. Does this make a difference? Did you inherit them from your grandfather when your grandfather died? If so, the basis steps up to the fair market value at the date of your grandfather's death. So if your grandfather paid $300 for the shares, and when he died their fair market value was $400, your basis in the shares when inherited will be $400. If he bought them and just immediately gave them to you, or bought them in your name, or whatever, your basis will just be whatever your grandfather paid for them. Either way, you shouldn't any tax on them if you are in a low enough tax bracket (again, below 25%), so the basis doesn't really matter unless you realized a loss from the sale (you sold the shares for less than what the basis is). Are you sure you're talking about actually owning and selling the mutual funds? Or did you did your grandfather set up some kind of college savings plan?
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Jan 11, 2012 15:56
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quote:I'm not looking to be exact, at least close. This is the first year my husband and I should have stable income that's not really screwy with extra contract income on top of our salary. Last year we have to pay a couple thousand because we underpaid, this year it looks like we'll get a couple thousand back. I'm still waiting for some to come in, but it would be nice not to under/overpay by that much. I use Taxact.com to do our taxes. What calculators have you tried so far? Have you tried the IRS tax calculator?
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Jan 11, 2012 20:42
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quote:Quick question: how does the saver's credit work when we are married filing jointly and one of us is a full-time student but the other is full-time employed? I know being a student disqualifies you, but it is unclear if only one of us is a student. The employed spouse's contributions to a retirement plan can contribute to the credit. The student's contributions to a retirement plan cannot. The key aspect is that the person who makes the contribution is not a student. quote:Another unrelated question: I own stock that was given to me by my grandfather as a minor. It was given to my dad in trust in TX under the "uniform gifts to minors", and on the stock account it states: STEPHEN MY DAD CUST AARON MYSELF UGMA TX. Whose identifying number (social security number or EIN) is on the stock account?
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Jan 12, 2012 21:41
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quote:My pa's. Then he'll be receiving the 1099, and the IRS will be expecting him to pay the tax.
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Jan 12, 2012 22:19
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quote:If the shares are transferred to me, is this a taxable event for either myself or my dad? Depends on the value of the shares, but assuming your dad is married and the fair market value of the shares are below $26,000, then there's no taxable event or filing requirements. If they are above $26,000 then there's potentially gift tax implications, but unless your dad is a baller whose been giving away huge amounts of money for years then your dad (and you) won't owe anything for gifting. quote:They are already "held" by me albeit in custodianship. How is my basis (for future sale by me) determined, is it the price when it is transferred, or when it was purchased? This is actually a more complicated question than you might think. Your basis will ultimately depend on whether you sell the stock at a loss or gain or "in between" the two basis amounts. You'll need to keep track of both the basis of of the price when transferred, and how much your dad actually paid. Here's a detailed summary. http://www.fairmark.com/capgain/basis/gift.htm You should also confirm with your dad that he is indeed receiving the 1099-DIV and reporting this income on his tax returns.
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Jan 12, 2012 23:46
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