Just remember this–all deductions are net losers. I’d rather have no deductions, if at all possible.
But if you can’t pay cash for your house, and you have to pay property taxes, go ahead and take the deduction.
For the IRA stuff there were no gray areas. I claimed it to lower my taxes and never put the money in.
Penalty was $400 + the difference in taxes based on the new calculated income
I just claimed I forgot to make the payment since I filled out my taxes a month before the due date and it slipped my mind.
However, the bigger issue was that I did a lot of option trading that year and for some reason my broker decided not to submit the purchase price and only reported the selling price [that too the notional value of the underlying security and not the option price (aholes) and made my cost basis 0, making it look like I made a few million dollars in trading income that I didn’t report] Worst part was that I lost money trading that year - I can get into details about how hubris is a trader’s # 1 enemy but that will take pages…
So I had to then provide details on each trade and how the net result was a loss 
and how generous I was by not claiming my trading loss limit of $3k [obviously they could careless when it comes to voluntarily not claiming add’l deductions…]
Funny thing is that they caught me 2 years later. I got the notice in late 2012 about my 2010 filing (so technically 1.5 years later) but they caught up nonetheless.
PS: Now I think I am on their ‘tax evaders’ list so I need to tread very carefully for the next few years in my returns.
^ Yup. I would agree you’re on their list. Be prepared for frequent letters from the IRS now…
YO GREENIE. I’m prolly gonna be hitting up the Midland/Odessa metropolis in Q4 for a work trip out to da oil patch. Drop me an email at “my username @ gmail . com” so I have your contact info. We’ll grab lunch/dinner/lap dance (depending on the price point).
E-mail sent!!!
How much time I can find to goof off depends largely on when you come out. Tax season runs through October 15, and the new baby is coming the day after tomorrow. But I’ll definitely do everything in my power to at least grab lunch or dinner.
I don’t know about lap dance, though. Wife might pull out her own hacksaw, and she probably wouldn’t limit it to just the sack. Plus, there’s only one strip joint around, and by the looks of it–you don’t wanna go in. Shootings, drugs, fights–all sorts of bad stuff happens there.
^ No Homo?
Greenie, any last words of wisdom as we wrap up 20+13? Is tax loss harvesting for investments still $3k? I’ll sell off some of the losers to net out my gains.
Has the IRS released anything related to funds? So if I dump my Vanguard Growth fund and jump into an iShares Growth Fund, does that negate my tax loss strategy? In the IRS pub it says options, convertible bonds, and making an identical move in your 401k/IRA as disallowed.
On a personal (as opposed to corporate or business) level, I don’t know a lot of tax tips or tricks. If you don’t own a business, your deductions are pretty much limited to the page 1 deductions and the Schedule A deductions.
Yes, capital loss carryforwards are limited to $3k. But why sell losers to net out gains? If anything, you need to sell winners to offset losses. (Assuming you have >$3k to carry forward, that is.)
And what IRS pub are you talking about? That’s not in 560 or 590. And I’m not sure that “identical investments” is prohibited within a TDA.
One thing to consider–if you’re in the lower tax brackets and have a sizable amount in a traditional IRA/401k, then you might consider converting some of it to Roth while you’re in the lower tax bracket. Just make sure you don’t accidentally bump up to the next bracket.
Yo Greenie - can I use an investment property as a tax write off if I am not the sole owner nor living in it?
Depends.
Are you renting it out, or have you tried to rent it out this year?
If yes, then that is a rental property (goes on Schedule E), and it will NOT reduce your capital gains.
If no, then it is a capital loss or a passive loss, and can reduce other capital/passive losses.
It is the latter, i am a bit confused. Can i use it to negate cap gains or can i use it against ordinary income / comp/bonus?
It sounds like an investment property, and should go on Schedule D (capital gains).
Do you have other capital gains? If so, it will reduce them. If not, it will be subject to the $3k loss carryforward until you do have capital gains.
No, you can’t use it against ordinary income.
^ Greenie,
I’m offsetting my gains with my losses. My equities ran this year and my commidities tanked. Therefore I’ll net out my gains with my losses on paper. I’ll jump from one commodity fund to another to remain invested to my allocation, yet realize the $3k loss for tax purposes.
Hence, my question for any recent ruling on say, jumping from an iShares commodity fund to a Proshares commodity fund. Different tickers but nearly identical makeup. noumsayin’?
Are you losses > gains? That’s the only way you’ll get to take a $3k loss (unless you have prior year’s unallowed losses).
And this has nothing to do with your IRA or 401k. You can “switch” funds as often as you like within them and not violate the wash sale rules.
Would jumping from an iShares commodity fund to a virtually identical Proshares fund violate wash sale rules? In theory, probably so, since they’re virtually identical investments. In practice, I don’t know if your B/D will pick up on the fact that they’re virtually the same, so they may not report it on your 1099. If they don’t, then I wouldn’t worry about it.
Let me look for an answer on this one.
As best I can tell. selling one fund and buying another virtually identical fund is NOT a violation of th wash sale rules.
In other words, you call sell your Vanguard 500 fund at a loss and realize the loss. Then you can turn around and buy the Fidelity Spartan 500 fund, and it would NOT be considered a wash sale.
To me, Vanguard 500 and Fidelity Spartan 500 are virtually identical securities, but the IRS is very vague on the definition of “substantially identical”. About the only time you’ll ever get dinged for a wash sale is if it the exact same security.
This is a really gray area, and it seems that if you ask ten different CPA’s, you get ten different answers. But remember the words of the famous Michael Jordan, “You miss 100% of the shots you don’t take.” (Or was it Wayne Gretzky? I can’t remember.) That is, if you don’t take the deduction, then you won’t get the deduction. (As tautalogical as it may seem, there is some wisdom there.)
^ (Mr. Burns Snicker) Excellent!
BTW–Wanted to tell you guys (CVM in particular) about a fairly interesting blog WRT financial planning. It’s called “Nerds Eye View” written by Michael Kitces. You can find it at kitces.com.
It’s not really heavy on CFA-type investing & valuation stuff, but you might find some interesting things regarding estates, trusts, IRA’s, etc. This is definitely geared more toward the CFPs of the world and not the CFAs, but there’s a lot of info that you can digest that’s not “how to pay off your credit card” type of stuff.
As I tee up my documents for 2014 taxes, I was hoping the BSD Greenie could chirp up. Do you have any guidance for us hacksaw tax filers? Are there any loopholes you can share?
Yes, which version of TurboTax should I use?
^Never use an Intuit product if you can help it. (Quickbooks might be the sole exception.)
And make sure you have health insurance. If you don’t, then say you do so you don’ thave to pay the penalty. I don’t think there’s a mandate to prove that you have it. I think it’s just a “check-the-box” question on line 61 of the 1040.
Remember that if you get a 1099-Misc, you have some additional options that you don’t have as a regular W-2 employee. I talked about that in some thread–maybe this one.
Other than that, I can’t really think of any blanket advice to throw out there. Just the standard stuff. Of course, if you have specific questions, feel free to ask.