Owner: Gina's Tax Blog URL:http://glgcpa.blogspot.com/ Join Date: Tue, 08 Aug 2006 11:21:09 -0500 Rating:1 Site Description: This blog provides general information about U.S. and Texas taxes by Gina L. Gwozdz, CPA. Gina is the owner of Gina's Tax Service. Her main goal is to help all her clients minimize their tax liability within the constraints of the law. Site statistics:Click here
0% Interest Loan 2007-05-06 22:35:00 Emma asks:
My husband and I would like a bigger home. The houses we've been looking at are either slightly beyond our reach, or affordable but in need of work. My mom would like to loan us $48K to $60K at zero percent interest. (The exact amount is yet to be determined.) Does the IRS consider the forgone interest to be a gift? Any way to avoid it?
Possibly relevant facts:
Mom plans to give Read more:Interest
Qualified Domestic Relation Order 2007-05-06 04:36:00 Jeremy asks:
My financial planner told me that I can make withdrawals from my 403(b) account at any time without early withdrawal penalties or federal income tax consequences because I obtained this particular 403(b) account as the result of a Qualified Domestic
Relations Order
(QDRO). Then as I was leaving his office he handed me a pamphlet that states that I cannot rely on any tax advice he
Second Home or Investment Property? 2007-05-06 04:09:00 Adam asks:
I bought a new home last year and moved into it. My previous home, which I owned for over 10 years, is for sale but I don't expect to sell it very soon.
How should I treat the expenses on my previous home? Do I have to treat it as a second home or can I treat it as investment property and then deduct all my utilities, association fees, insurance and depreciation? Is it worth it to Read more:Second
Foundation Collects Earning = No Tax? 2007-05-14 00:16:00 Ryan asks:
I'm retired with a federal pension and social security. Financially I do not need to work, but I miss it. I really enjoyed working, but I don't want the pressure of a full time job anymore. I've been told that if I set up a foundation, I can freelance, doing the same work I use to do, only instead of having people pay me, ask them to donate the money to my own foundation. I'll get Read more:Foundation
, Earning
Independent Contractor 50% Meal Limitation 2007-05-16 17:19:00 Seth writes:
I work several times a year as an independent contractor for a company. I travel to various cities and deliver lectures. I receive a set fee for each lecture. In the past, I always submitted my receipts for my travel expenses and was reimbursed by the company. At year end, the only income ever reported to me on my 1099-Misc from this company was from the lecture fees. The money Read more:Contractor
Small Business Bookkeeping 2007-05-20 19:39:00 Now that you've organized your business records you need to develop a bookkeeping system. A bookkeeper's job is to record your books of original entry. This means they write checks, create invoices, make out deposit slips, try to collect on old accounts and deal with creditors. For most start-ups and small businesses this “bookkeeper” is also the owner. Most owners want and need to spend time Read more:Small
, Business
, Bookkeeping
, Small Business
Starting a Business 2007-05-22 20:57:00 Bryan from VA writes: Hello Gina, I have been reading your blogs, and I thank you for some very informative reading. Lately I have become increasingly interested in starting my own small business. I am looking for advice as to how I should go about doing this. Before taking this risk, it would help me to have you provide me with some steps or processes I need to look into before Read more:Business
Estimated Tax Payment 2007-05-25 12:09:00 Steve asks:
For income tax, I usually adjust the tax withholding on my salary once or twice a year so that I meet one of the safe harbors. However I sold a rental property which will suddenly give me a lot of additional income. I've adjusted my withholding upward somewhat, but I'm worried I won't be able to cover my whole liabiity this year. Thus, I'm thinking I should make an estimated tax Read more:Estimated
, Payment
Late Section 83(b) election 2007-05-30 09:47:00 Dan asks:
I was employed by Company X from 2001 to June 2006, when I resigned. I had vested stock options and I purchased the stock options one month after I resigned in July, 2006. My purchase price was 10 cents a share and the estimated fair market value at the time of the purchase was the same, 10 cents a share. I purchased about 89000 shares. At the time I purchased the stock options I Read more:Section
Basis and Holding Period of Distributed Assets 2007-06-04 08:33:00 Bill asks:
My mother had a number of securities in an irrevocable trust. I am the sole primary beneficiary (and trustee) on the trust. Under the terms of the trust, the trust ended when she died and I am to receive the contents of the trust.
My mother died last month and I am in the process of transfering the assets of the trust to me as per the terms of the trust. My questions are:
1) Do I Read more:Basis
, Period
, Distributed
, Assets
Professional Gambler? 2007-06-10 20:37:00 Andy writes:
I am an early retiree who has no wages, but I spend as much time as I can playing poker. I wouldn't say I'm a professional poker player, but I play 2 - 3 days a week for about 10-15 hours. If I declared $2,500 in winnings, and my total income is under $95,000, could I contribute $2,500 in a Roth IRA? I've tried to research this on the web, but the sources were vague as to whether
Your Pet's Medical Expenses 2007-06-09 20:57:00 Cindy asks:
My two beloved cats have had a lot of medical bills this year......close to $6000. Sometimes I pay with a check to the vet and the check is written payable to "Dr. Lastname". Other times I pay with a credit card and it shows up "Medical Center". Can these fees be deducted as medical expenses.
Thanks alot,
Cindy
My reply:
Hello Cindy.
I'm reading into your message that you Read more:Expenses
U.S. Tax for U.S. Citizens living abroad 2007-06-13 06:06:00 George asks:
I thought bonafide foreign nonresident status exempted a U.S. citizen from 100% of federal income tax. So my wife and I did not pay our federal income or state income taxes on April 15, 2007. I thought the $82,400 foreign earned income exemption applied only to the physical presence test. I mean why should a nonresident pay taxes?? Now, the internet is full of information on the Read more:Citizens
Nondeductible IRA to Roth in 2010 2007-06-17 12:28:00 Julie writes:
I am thinking of making non-deductible IRA contributions this year and on and then convert to Roth IRA in 2010, as described here:
http://finance.yahoo.com/columnist/article/moneymatters/16201
I already have a deductible Rollover IRA and Roth IRA. However my income is over the limit for Roth IRA contributions. Also my company has a 401K to which I contribute. Up to now I saw no
Shares Transfered from IRA 2007-06-22 11:36:00 Jeff writes:
I over contributed to my Roth IRA and was required to removed the excess contribution and associated earnings which was done last year. Rather than selling shares of stock and moving cash out of the account, the brokerage let me transfer shares of stock from my Roth account into a taxable account.
Is the cost basis for the shares in my taxable account, the value of the stock on the
Fewer Partnership Returns 2007-06-24 11:43:00 One of the many changes made in the Small Business and Work Opportunity Tax Act of 2007 reduces the number of partnership returns that will need to be filed for 2007.
Under the old law, if both a husband and wife were sole owners of their unincorporated business they were required to file a partnership tax return (Form 1065). Partnership tax returns can quickly become complex and are generally Read more:Fewer
, Returns
Gifting 2007-07-08 05:05:00 Ray wonders:
If I "gift" some shares of a mutual fund via a broker to broker transfer is this a taxable event (regular or AMT) for me?
My reply:
Hello Ray!
Since you have the word gift in quotes and you did not provide me with any more information, I will assume that you are speaking of a plain old-fashioned, "Here, I want you to have this" gift; however, if it's something else, then the
Taxpayers Beware? 2007-06-25 10:29:00 Tax preparer penalties are on the rise and you, as a taxpayer, may think this will either not affect you, or help you. The law was passed because they believed that it would promote more accurate tax returns. However, as usual, they didn't think this law out very well before they passed it.
What this law has actually done (or will do, as it is not yet effective), is make the disclosure Read more:Taxpayers
, Beware
Avoid tax on 401(k)? 2007-07-18 12:34:00 Jake asks:
Assume at the age of 60 I retire to a country that does not have an income tax and other than the 401K account, I have no assets in the US. At age 65, as a non-US citizen, I liquidate my entire 401k account and transfer it to a bank in the new country. Do I pay any penalty / tax to the US gov't? It would seem that there must be some provision that prevents total tax avoidance in that Read more:Avoid
W-2 and Self-Employment Taxes 2007-07-16 14:57:00 Trent asks:
Suppose I make about $100,000 in a salaried position where my employer pays 1/2 FICA. But then I also have a sole-proprietorship where I make about $100,000 and current pay "both halves" of FICA.
How do I work this into the FICA limit of ninety something thousand (for SS of course...no limit on medicare/caid)? Would I pay the roughly 15% up to the limit?
I am currently paying Read more:Taxes
Obtaining a Copy of a Prior Year Return 2007-07-21 06:33:00 The IRS has a special form for requesting a photocopy of a previously processed tax return and attachments. If you need to obtain a copy of a prior year return, complete Form 4506 , Request for Copy of Tax Return
, and mail it, along with an IRS processing fee of $39 for each tax period requested, to the IRS address listed on the form for your area. Unless the IRS has Read more:Prior
Personal Residence 2007-07-20 05:55:00 Steve writes:
I co-own a house with my domestic partner. We live in California, but are not registered as domestic partners. The value of the property has dobuled since we purchased it, and it is now worth approximately $1M. All costs related to the house have been split 50/50 (down payment, mortgage, taxes, improvement projects, maintenance). We are both disciplined Quicken users so we can Read more:Personal
, Residence
Tradiation Non-deductible IRA Contributions 2007-07-26 16:30:00 Dan asks:
I'm debating if I should start an IRA or not. The problem is that all contributions would not be deductible. As far as I understand this, it means that any capital gains sells would not be taxed until I was ready to withdraw.
My question is about withdrawing money from this account. Are the contributions I made post-tax taxed again upon withdrawal or only the earnings? It would make
Net Paycheck 2007-07-29 08:59:00 Eldon writes:
I graduated from college last May and have been trying to evaluate several job offers that I have. I'd like to estimate how much money I will be paying in taxes so that I can determine what my actual take home pay will be at each job, and so that I can also determine how much I'll be able to save, how much I can budget to spend on housing, etc. I'm having difficulty finding a Read more:Paycheck
Estate and Gift Tax Liability 2007-08-02 07:00:00 Alice asks:
If someone has all their money in joint or POD/TOD bank accounts and dies, I know that the money is not subject to probate, but if estate taxes are due, how does the IRS get it? It seems to me that the IRS is entitled to get it even though the money passes directly, but I'm not sure of the mechanics, and would love an explanation.
I would also think that if there were other assets in Read more:Estate
, Liability
Investment Related Questions 2007-08-01 08:19:00 Ben asks:
My question is regarding my subscription to investment newsletters and paid subscriptions to investment websites. Can I deduct that when i do taxes, if so what documentation will i need. I also have a sharebuilder account and pay a monthly fee for that. What about any losses i have incurred? Also, how would i go about getting the standard 30 for the spanish american war?
Ben
My reply:
LLC taxes 2007-08-08 17:28:00 Reed asks:
I have a question about LLCs and federal taxes.
I know that if you create an LLC and don't file an 1120 (i.e. you don't pay yourself as a W2 employee of your own business), then whatever income you make in the LLC just flows through to your personal taxes.
What I don't know is how your taxes and deductions change when you do file an 1120. Do you end up with an extra level of federal
Estimated Tax: Self-Employed 2007-08-12 13:03:00 Trina asks:
I'm self-employed with a highly variable income. Last year I made a little money in the first quarter and second quarter and then more in the 3rd quarter with significantly more in the last quarter of the year. I paid estimated taxes in each quarter based on the income I had and assuming a pretty high tax rate. At the end of the year I got hit with a penalty for not paying my Read more:Estimated
, Employed
Investment Newsletters 2007-08-15 19:55:00 Craig asks:
I was told that my investment newsletter services tax-deductible, but I don't know where to put them on my tax return? Do I spread the cost over the investments I bought based on the news services' advice?
My reply:
The cost of your investment newsletters are considered a miscellaneous itemized deduction on Schedule A, subject to the 2% of Adjusted Gross Income (AGI) exclusion. The Read more:Newsletters
Bankupt Estate 2007-08-15 11:41:00 Ruth asks:
My father died recently, and I'm trying to organize his financial affairs. I'm the only heir, and executor of his estate.
He had a lot of debt and very few assets, so there will not be enough money to pay everything. He has a small amount of money in a bank account, and that's it. No real estate, no investment accounts, his car wasn't paid off, and there are no other assets.
I will Read more:Estate
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