Tax question OT

Toxarch · April 2018

You are just now doing your taxes? Talk about procrastination. I did mine a year ago.

When you file an extension and you owe money, you still have to send a check for the best guesstimate of what you owe. Then do your taxes and pray you were close or you will incur a penalty.

YukonRon · April 2018

Thanks guys, this has been fun. Like root canal fun.

thetrim · April 2018

lousubcap said:

The extension is all good but if you owe $$ you will also owe interest on the $$. You become a bank for the gubmint. Just sayin...

Yup that happened to us last year. Funny thing is I don't remember ever getting interest on my Apr 15th payout every year prior.

thetrim · April 2018

Ozzie_Isaac said:

I find if you never file, then there is nothing to audit.

The Al Sharpton approach - not bad. Just make sure you come out as a staunch Democrat, and you shouldn't have any problems.

YukonRon · April 2018

thetrim said:

Ozzie_Isaac said:

I find if you never file, then there is nothing to audit.

The Al Sharpton approach - not bad. Just make sure you come out as a staunch Democrat, and you shouldn't have any problems.

Stirring the cauldron early on a Sunday.....
Have fun!

pgprescott · April 2018

Ozzie_Isaac said:

Fred19Flintstone said:

Excuse me for saying so, but rather than ask a bunch of drunken, well-meaning screw balls you've never met important legal tax advice, perhaps a safer course of action is to have reserved a bit of the $6K and paid a reputable cpa for advice? Am I the only one thinking this?

I just listened to a 6 part podcast on Bernie Madoff. I am fully equipped to provide tax advice.

Is that the one titled “ Fonsey cool, Ponzey not cool. Life lessons” ?

YukonRon · April 2018

thetrim said:

Ozzie_Isaac said:

I find if you never file, then there is nothing to audit.

The Al Sharpton approach - not bad. Just make sure you come out as a staunch Democrat, and you shouldn't have any problems.

Stirring the cauldron early on a Sunday.....
Have fun!

20stone · April 2018

Foghorn said:

If someone else knows better, please chime in.

The sale of the stock is a form of income. Either long term (if you held it for at least 1 year) or short term investment income.

The amount of taxable investment income is the total sale price minus the amount of money it cost you to buy and sell it (purchase price and any transaction costs like the brokerage fee).

So, if you bought it for $2000 and paid a $50 brokerage fee on each transaction then your "cost basis" is $2100. That means your income (appropriate term is "captial gain") is $7900.

Short term capital gains are taxed at your regular income tax rate.

Long term gains max out at 20% (I think).

What's not clear to me is who kept your $4000. The government - or your brokerage.

If the government has it then the $4000 will be added to the total taxes you paid and you'll get what you deserve when you file.

I don't what to say about the possibility that your brokerage is holding it.

I hope that helps.

While I would generally recommend STRONGLY AGAINST taking financial advice from a doctor (“advisors” chase them as much as they do NBA draftees and lottery winners), @Fog appears to be on point here. That must be from his recent conversion to homemade biscuits.

Austin Egghead · April 2018

RRP said:

Foghorn said:

If someone else knows better, please chime in.

The sale of the stock is a form of income. Either long term (if you held it for at least 1 year) or short term investment income.

The amount of taxable investment income is the total sale price minus the amount of money it cost you to buy and sell it (purchase price and any transaction costs like the brokerage fee).

So, if you bought it for $2000 and paid a $50 brokerage fee on each transaction then your "cost basis" is $2100. That means your income (appropriate term is "captial gain") is $7900.

Short term capital gains are taxed at your regular income tax rate.

Long term gains max out at 20% (I think).

What's not clear to me is who kept your $4000. The government - or your brokerage.

If the government has it then the $4000 will be added to the total taxes you paid and you'll get what you deserve when you file.

I don't what to say about the possibility that your brokerage is holding it.

I hope that helps.

I agree with your explanation. May I add one more probable explanation? Somewhere in the typical "ten page fine print" agreement that he signed whenever he authorized his broker to withhold some tax percentage in the event of a sale. That clause is rather common in the fine print!

I know in my own case I have signed off on that agreement in effect with my brokers as I will assume any tax liability thus specifically holding them harmless for not withholding any potential tax liability.

Our experience was just about what Foghorn and Ron have written.
You should get a 1099-B from the brokerage house. The Brokerage house will either send the Government 1099-B or their own form showing the sale and amount held back for taxes. Make sure your the 1099-B is included in your return.

thetrim · April 2018

YukonRon said:

thetrim said:

Ozzie_Isaac said:

I find if you never file, then there is nothing to audit.

The Al Sharpton approach - not bad. Just make sure you come out as a staunch Democrat, and you shouldn't have any problems.

Stirring the cauldron early on a Sunday.....
Have fun!

Sunday is the new Friday. Peace be with you!

alaskanassasin · April 2018

I will echo others on here. I take all the tax correspondence I receive in mail during Jan and Feb, put it in a manila envelope and drop it off at my wonderful CPA. It is nice having a CPA for other reasons too, sometimes before I make a $$$ move I will call her and see what she thinks. Unfortunately my taxes are due March 1.

Ozzie_Isaac · April 2018

pgprescott said:

Ozzie_Isaac said:

Fred19Flintstone said:

Excuse me for saying so, but rather than ask a bunch of drunken, well-meaning screw balls you've never met important legal tax advice, perhaps a safer course of action is to have reserved a bit of the $6K and paid a reputable cpa for advice? Am I the only one thinking this?

I just listened to a 6 part podcast on Bernie Madoff. I am fully equipped to provide tax advice.

Is that the one titled “ Fonsey cool, Ponzey not cool. Life lessons” ?

Ponzi Supernova. It was amazing how easy it was to swindle people of 65 billion. Short answer was, as long as you paid the rich people, nobody cared.

YukonRon · April 2018

A wise man told me a long time ago, a good doctor, a great attorney, and an even better CPA will ensure a wonderful life.
He forgot about adding the BGE.......then it would be perfect.

jeffwit · April 2018

Fred19Flintstone said:

Excuse me for saying so, but rather than ask a bunch of drunken, well-meaning screw balls you've never met important legal tax advice, perhaps a safer course of action is to have reserved a bit of the $6K and paid a reputable cpa for advice? Am I the only one thinking this?

I stayed in a Holiday Inn Express last night.

Austin Egghead · April 2018

YukonRon said:

A wise man told me a long time ago, a good doctor, a great attorney, and an even better CPA will ensure a wonderful life.
He forgot about adding the BGE.......then it would be perfect.

100% agreement. A good Tax CPA is a must.

Foghorn · April 2018

20stone said:

Foghorn said:

If someone else knows better, please chime in.

The sale of the stock is a form of income. Either long term (if you held it for at least 1 year) or short term investment income.

The amount of taxable investment income is the total sale price minus the amount of money it cost you to buy and sell it (purchase price and any transaction costs like the brokerage fee).

So, if you bought it for $2000 and paid a $50 brokerage fee on each transaction then your "cost basis" is $2100. That means your income (appropriate term is "captial gain") is $7900.

Short term capital gains are taxed at your regular income tax rate.

Long term gains max out at 20% (I think).

What's not clear to me is who kept your $4000. The government - or your brokerage.

If the government has it then the $4000 will be added to the total taxes you paid and you'll get what you deserve when you file.

I don't what to say about the possibility that your brokerage is holding it.

I hope that helps.

While I would generally recommend STRONGLY AGAINST taking financial advice from a doctor (“advisors” chase them as much as they do NBA draftees and lottery winners), @Fog appears to be on point here. That must be from his recent conversion to homemade biscuits.

Yes, @20stone, that's it. (sighs)

Would this be a bad time to admit that I prefer the biscuits out of a can?

YukonRon · April 2018

Foghorn said:

20stone said:

Foghorn said:

If someone else knows better, please chime in.

The sale of the stock is a form of income. Either long term (if you held it for at least 1 year) or short term investment income.

The amount of taxable investment income is the total sale price minus the amount of money it cost you to buy and sell it (purchase price and any transaction costs like the brokerage fee).

So, if you bought it for $2000 and paid a $50 brokerage fee on each transaction then your "cost basis" is $2100. That means your income (appropriate term is "captial gain") is $7900.

Short term capital gains are taxed at your regular income tax rate.

Long term gains max out at 20% (I think).

What's not clear to me is who kept your $4000. The government - or your brokerage.

If the government has it then the $4000 will be added to the total taxes you paid and you'll get what you deserve when you file.

I don't what to say about the possibility that your brokerage is holding it.

I hope that helps.

While I would generally recommend STRONGLY AGAINST taking financial advice from a doctor (“advisors” chase them as much as they do NBA draftees and lottery winners), @Fog appears to be on point here. That must be from his recent conversion to homemade biscuits.

Yes, @20stone, that's it. (sighs)

Would this be a bad time to admit that I prefer the biscuits out of a can?

Perfect. This way you can admit it, and nobody will know because nobody will be reading this.

GATraveller · April 2018

Paying them is more of a suggestion than a rule....right?

JethroVA · April 2018

+1 on hiring a pro. I was screwing up depreciation of a rental property for years. Hired a pro who refiled and got me a bunch of money back.

HeavyG · April 2018

GATraveller said:

Paying them is more of a suggestion than a rule....right?

Just claim to be a "sovereign citizen" and you'll never have to pay taxes again.

Works every time.

GATraveller · April 2018

HeavyG said:

GATraveller said:

Paying them is more of a suggestion than a rule....right?

Just claim to be a "sovereign citizen" and you'll never have to pay taxes again.

Works every time.

There are some great videos on YouTube of folks claiming "sovereign citizen" at traffic stops. They'd have to revoke my tazer privileges if I were a cop.

Tax question OT

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