7th Annual Anandtech Tax Time Thread

[spidey07]

Me and my fiancee both own homes and they are our respective primary residences. If we sell both properties after we are married and use all the capital for our new house will either of us have to pay capital gains tax? How about if we don't use all of the capital for the new purchase?

Assume the gain is under 200K from both houses, total/combined.

 

[onza]

Me and my fiancee both own homes and they are our respective primary residences. If we sell both properties after we are married and use all the capital for our new house will either of us have to pay capital gains tax? How about if we don't use all of the capital for the new purchase?

Assume the gain is under 200K from both houses, total/combined.

Excluding the Gain
http://www.irs.gov/publications/p523/ar02.html#en_US_publink100027560

 

[KK]

I have a question regarding interest deductions. I'm in the process of purchasing a new home, and currently we have a mortgage on the house we are in now. Once we start making payments on the new house also, will we be able to use the interest we paid in from both mortgages as deductions on next year's return? We do plan on keeping the old house for awhile before putting it on the market.

Thanks

 

[onza]

I have a question regarding interest deductions. I'm in the process of purchasing a new home, and currently we have a mortgage on the house we are in now. Once we start making payments on the new house also, will we be able to use the interest we paid in from both mortgages as deductions on next year's return? We do plan on keeping the old house for awhile before putting it on the market.

Thanks

What will each of the mortgages be totaling?

 

[EagleKeeper]

I have a question regarding interest deductions. I'm in the process of purchasing a new home, and currently we have a mortgage on the house we are in now. Once we start making payments on the new house also, will we be able to use the interest we paid in from both mortgages as deductions on next year's return? We do plan on keeping the old house for awhile before putting it on the market.

Thanks

Interest on a second home is deductible up unless you are using ithe residence for rental income.
IRS FAQ

 

[Mermaidman]

I'm self-employed and had more income in 2009 than in 2008. If the total of my estimated tax payments for 2009 is at least the amount of my 2008 taxes, then I'm safe from underpayment penalty?

I looked at Form 2210 and believe I'm correct, but it seems like a big loophole. Am I missing something? Wouldn't it mean that if someone had a small tax liability one year, then he can significantly underpay the next year and still avoid penalties?

(Thanks for your annual tax time threads!)

 

[EagleKeeper]

I'm self-employed and had more income in 2009 than in 2008. If the total of my estimated tax payments for 2009 is at least the amount of my 2008 taxes, then I'm safe from underpayment penalty?

I looked at Form 2210 and believe I'm correct, but it seems like a big loophole. Am I missing something? Wouldn't it mean that if someone had a small tax liability one year, then he can significantly underpay the next year and still avoid penalties?

(Thanks for your annual tax time threads!)

IRS FAQ

You are safe and it is a loophole. However, the tax must still be paid in the end

 

[apac]

I had a mutual fund go through a "non-taxable merger". How exactly is the gain/loss here reported on taxes? The net loss prior to the merger was -$1700, the net gain after the merger was +$900.

What I'm confused about is the "non-taxable" part. Does that mean that any net gains/losses prior to the merger are not taxable, meaning I would not be able to report the combined net loss of -$800?

 

[MrsBugi]

Question: My husband and I got married in June 2009. We received some $$$ in wedding gifts (one significant gift in particular from our parents), do we have to report the cash gifts we received? If so where and how, and will it be taxed?

Thanks again for offering this EagleKeeper.

 

[onza]

Question: My husband and I got married in June 2009. We received some $$$ in wedding gifts (one significant gift in particular from our parents), do we have to report the cash gifts we received? If so where and how, and will it be taxed?

Thanks again for offering this EagleKeeper.

Just out of curiosity was it under 24k? (if your parents are still married)

 

[TheWart]

First, let me say thanks for the very helpful thread! Now for a question:

I have a couple of different brokerage accounts that I use for trading, as well as a third futures-only account. Now I am using Armen Tradelog to pull in the trading history for the first two accounts (I did stocks and options only in these accounts) as it adjusts for wash sales and everything automatically. It will spit out a completed Schedule D for me, but I am not sure what to do about my futures-only account. This is the first year I have had a futures account, and I know that I need to file a form 6781, but does that form need to be itemized like the Schedule D, or do I just take my year-end P/L from my futures broker and enter it on Form 6781?

I ask b/c it looks like I won't be able to import my futures account into Armen Tradelog, but if I don't even need to (since the Schedule D and Form 6781 don't 'overlap' right?) that would be great.

 

[EagleKeeper]

Question: My husband and I got married in June 2009. We received some $$$ in wedding gifts (one significant gift in particular from our parents), do we have to report the cash gifts we received? If so where and how, and will it be taxed?

Thanks again for offering this EagleKeeper.

Gifts to you are not taxed.

The gifter has a limit of 12K.
However each parent can gift making a total of @24K.

If the gifter exceeds that amount; they are liable for a tax.

 

[steppinthrax]

Are employment-based pension contributions tax deductable.
(e.g. my employer req 5% of my salary to be contributed to the State retirement pension system)

I believe it can be rolled into a IRA.

 

[Kalmah]

What's going to happen to me since I worked not at all this year and received unemployment without having taxes removed? I'm assuming they are going to send me some tax related papers hopefully soon?

 

[onza]

First $2,400 of Unemployment Benefits Tax Free for 2009

http://www.irs.gov/newsroom/article/0,,id=205633,00.html

Otherwise you will be taxed on the rest.

What's going to happen to me since I worked not at all this year and received unemployment without having taxes removed? I'm assuming they are going to send me some tax related papers hopefully soon?

 

[Kalmah]

First $2,400 of Unemployment Benefits Tax Free for 2009

http://www.irs.gov/newsroom/article/0,,id=205633,00.html

Otherwise you will be taxed on the rest.

Ahh, thank you, sir.

 

[EagleKeeper]

What's going to happen to me since I worked not at all this year and received unemployment without having taxes removed? I'm assuming they are going to send me some tax related papers hopefully soon?

You should get a 1099-G from the state listing your unemployment payments.

If you are lucky - the extra compensation above the $2400 will be offset by the normal credits

 

[minendo]

What is the smartest way to claim in my situation?

I own a house in Kansas, but worked all year in Texas. The house sits empty, but I have paid the mortgage plus interest for all of 2009. Additionally, I paid rent in Texas from April through the end of the year.

How to claim this?

 

[EagleKeeper]

What is the smartest way to claim in my situation?

I own a house in Kansas, but worked all year in Texas. The house sits empty, but I have paid the mortgage plus interest for all of 2009. Additionally, I paid rent in Texas from April through the end of the year.

How to claim this?

Rent has no bearing on the Federal Tax.
Because you worked in Texas; you had no state income tax.

You can follow normal procedures and use the Schedule A; claiming the interest, property taxes; plus any legitimate business expenses and charitable deductions.

OR

You can have intended on renting the place.
This will allow you to claim maintenance costs, interest, taxes on the property using the Schedule E. If you choose, you can claim depreciation (which must be accounted for when the property is sold)

 

[Homerboy]

Question regarding personal "investment" in small home business:

My wife owns and operates a small home business (gross sales receipts sub $40K/year).
This year we had to pump some of our own personal money in and some from my father in law due to some expenditures that were needed to expand and promote the business; roughly $3500.

I'm not sure how to list this additional "income" as its not sales and it was repaid very shortly after the investments where made (not loans as there was no interest etc).

We use Quicken to track the money and I had tentatively just tagged them as "Investment: Other Business Income (Schedule C)." However, when importing my Quicken database into TurboTax, that $3500 is showing up as "Other Income: Cash prizes, business interest, bad debts paid, etc" and in turn I'm getting taxed on it.

There is another field in TurboTax for "Income you gave back" which is labeled as "refunds, rebates etc...." I was thinking about just entering this $3500 into there, but it really wasn't customers I paid back etc...

Suggestions?
Thanks.

 

[EagleKeeper]

Homerboy

Manually just adjust the business income to remove the 3500

 

[Linflas]

When my father passed away in 1994 my 3 brothers and I inherited some land and a house in Maryland. The way the will was written it was all left to our mother to use but my brothers and I are the actual owners. My mother has been renting out the house since that time but we are planning to sell just the house and lot it sits on this year.

Am I correct in assuming that since none of us use it as our principal residence the tax consequences of this will be that the gain on the house will be taxed as a capital gain? Would the basis be the sale price less the value of the house at the time of my fathers death?

 

[EagleKeeper]

When my father passed away in 1994 my 3 brothers and I inherited some land and a house in Maryland. The way the will was written it was all left to our mother to use but my brothers and I are the actual owners. My mother has been renting out the house since that time but we are planning to sell just the house and lot it sits on this year.

Am I correct in assuming that since none of us use it as our principal residence the tax consequences of this will be that the gain on the house will be taxed as a capital gain? Would the basis be the sale price less the value of the house at the time of my fathers death?

You are correct on the basis.
1/4 of the capital gain would be taxable for each person

Also, because there was income from the property; that should have been declared over the past years. You and your brothers were the owners, not your mother.

Cost associated with the rental can be written off using the Schedule E

 

[Homerboy]

Homerboy

Manually just adjust the business income to remove the 3500

Just manually adjust the gross sales receipts by the $3500?

 

[Onita]

I just closed on a house on 11/30/09. Outside of the minimal interest paid for the year and the home buyer credit, is there anything else I can add to my refund regarding the house purchase?